US
sanctions have forced Russia to look at ways of securing its foreign
reserves. In recent years, Moscow has increased purchases of physical
gold and dramatically reduced its share of US debt bonds.
The
political standoff started in 2014, shortly after the conflict in
Ukraine and the referendum in Crimea in favor of joining Russia.
Several rounds of US sanctions followed, with the latest affecting
major Russian companies and individuals who run them.
In
April, Russia sold half of its US sovereign debt bonds, getting rid
of nearly $47 billion worth of securities, according to US Treasury
data released last week. The sell-off is a signal that Russia’s
financial regulators are diversifying the country’s foreign
exchange reserves, say analysts at the Copenhagen-based Danske Bank.
Russia
sold more than any other major foreign holder of US debt – even as
its reserves grew on the back of rising oil prices. The country’s
current stake shrank by nearly four times against the hefty holding
of more than $176 billion eight years ago.
According
to the Central Bank of Russia (CBR), the country’s top controller
of foreign exchange reserves, all kinds of risks, including
financial, economic and geopolitical are factored when the reserves
are allocated. “We pursue the policy of safe and diversified
holdings,” CBR Governor Elvira Nabiullina said, commenting on the
issue.
Meanwhile,
Russia’s gold holdings have been steadily increasing, bringing its
share of the precious metal to its highest level in nearly two
decades. Last month, Russia’s gold holdings grew by one percent to
62 million troy ounces, worth $80.5 billion, according to the CBR. In
May, Nabiullina said gold purchases helped to diversify reserves.
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