Russia is cutting the U.S. dollar from its $186 billion National Wealth Fund as Washington continues to impose sanctions on Moscow.
The move was announced at the St. Petersburg International Economic Forum on Thursday by Finance Minister Anton Siluanov. “Like the central bank, we have decided to reduce investments of the NWF in dollar assets,” he told reporters, according to a Reuters translation, adding that the NWF will instead invest in euro, Chinese yuan and gold assets.
The changes to the NWF are expected to happen within the next month. Once complete, the share of euro assets in the fund is expected to stand at 40%, the yuan at 30% and gold at 20%. Meanwhile, the Japanese yen and British pound will likely make up 5% each.
Timothy Ash, senior emerging markets sovereign strategist at BlueBay Asset Manager, described the decision to ditch U.S. dollar assets as “very political” and one that’s meant to “send a signal” to President Joe Biden’s administration ahead of the upcoming summit with President Vladimir Putin.
“The messaging is ’we don’t need the U.S., we don’t need to transact in dollars, and we are invulnerable to more U.S. sanctions,” he said in a research note after the announcement, adding that it could be interpreted as a sign that Moscow is expecting more sanctions from the U.S.
Thai
Eng