Russia is ready to soften its anti-dollar rhetoric. The de-dollarization campaign has inflicted heavy losses on the domestic economy. A few years ago, President Vladimir Putin declared that Russia’s goal was to abandon the US currency in international settlements. So, the pundits from the ministry of finance and the central bank were assigned to the revision of the state portfolio. Despite common sense, the authorities pumped up their forex reserves with the yuan at the peak of its value. A few days later, Beijing devalued the national currency aiming to ensure competitive advantage to Chinese exporters. As a result, Russia’s forex reserves lost billions of dollars. However, Russian monetary authorities are not going to learn from their mistakes. Now the Kremlin wants to make the second attempt, this time increasing the yuan’s share in the National Welfare Fund.
At present, the Fund looks as follows: the US dollar and the euro account for 32% and 37% accordingly. The remaining part is represented by the pound sterling, the yen, and some other currencies. As of March 1, 2020 the National Welfare Fund was estimated at 8.3 trillion rubles or $123.2 billion. In essence, the Kremlin decided to buy the yuan with a view of making the Fund’s structure similar to the Bank of Russia’s forex reserves. Perhaps, the government plans just to allocate a part of the central bank’s yuan holdings to the National Welfare Fund. The idea has been confirmed by Russia’s finance minister Anton Siluanov. “We’ve set out a package of measures to adjust the National Welfare Fund’s structure for the one of the central bank’s forex reserves,” the official said.
