Connect with us

Breaking News

Russia Removes US Dollar Assets From Its Wealth Fund

Published

on

USA and Russia relations, cooperation strategy. US America and Russia flags on chess kings on a chess board | Russia Removes US Dollar Assets From Its Wealth Fund | featured

Russia decided to remove US dollar assets from its $186 billion National Wealth Fund. This is in response to Washington’s continued imposition of sanctions on Moscow.

Removing US dollar assets means that Russia will not invest totally in non-US dollar assets such as gold, Chinese yuan, and the Euro. 

RELATED: Biden Hits Russia with Sanctions while Removing 10 Russian Diplomats

Removing US Dollar Assets From The NWF

Russian Finance Minister Anton Siluanov announced the decision during the St. Petersburg International Economic Forum last Thursday.

“Like the central bank, we have decided to reduce investments of the NWF in dollar assets,” he told reporters. Instead of the greenback, Russia’s NWF will look into investments in euro, Chinese yuan, and gold assets.

The changes will start in July, which will include the investment ratio per asset. Euro investments will comprise 40% of the NWF, while the yuan will take 30% and gold at 20%.

Other assets such as the Japanese Yen and the British Pound will take 5% each. Russia’s National Wealth Fund came around initially as support to the country’s pension system. The NWF forms parts of the gold and currency reserves that totaled an estimated $600,9 billion as of May. 

Very Political Decision

Timothy Ash, senior emerging markets sovereign strategist at BlueBay Asset Manager, assessed Russia’s decision.

Raven_Steel_Ad-V2
Raven_Steel_Ad-05

He described the move to abandon dollar assets as “very political” meant to send a signal to President Joe Biden. The move happens ahead of a scheduled summit between Biden and Russian 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,” Ash said. It also means that Russia is expecting more sanctions from the US.

In contrast to warmer tones from former President Donald Trump, Biden often criticizes Russia. In April, the US imposed new sanctions over alleged election interference and cyberattacks against US government websites.

It also sanctioned Russia over alleged human rights abuses and the annexation of Crimea. Russia denies all the allegations. 

Digital Currencies Are The Future

Meanwhile, Russia’s central bank governor Elvira Nabiullina said that digital currencies are the future of financial systems. “I think it’s the future for our financial system because it correlates with this development of digital economy,” she said.

Moscow published a consultation paper on a digital ruble in October. In addition, the country hopes to release a prototype digital currency by the end of 2021. Consequently, pilots and trials could start next year, she said.

Consequently, the digital currency movement is something that might concern the US. Former U.S. Treasury official, Michael Greenwald said that “What alarms me is if Russia, China, and Iran each create central bank digital currencies to operate outside of the dollar and other countries followed them.”

Watch the Money Talks video reporting that Russia will remove dollar assets from sovereign wealth fund:

Do you favor the US having closer ties with Russia?

View Results

Loading ... Loading ...

Do you agree with the current US policy that continually pushes for sanctions against Russia? Also, should the US push for closer ties with Russia instead of playing one-upmanship?

Let us know what you think about US-Russia relations. Share your comments in the comment section below.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Copyright © 2020 Breaking News Alerts. This copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.

[email]
[email]