MOSCOW, Russia – The measure came after Moscow signaled a willingness to reduce its dependence on the dollar, noting that there are no plans to restrict transactions in the US currency.
Russia has said that the goal of de-dollarization is to improve the integrity of the Russian economy by protecting itself from the wave of US sanctions.
At the end of July 2018, the Russian Central Bank reduced the share of the dollar in its international reserves to 24.4%, while increasing the shares in euros and yuan to 32% and 14.7%, respectively, according to valuations banking services.
At the same time, the regulator increased the share of several other currencies from 12.4% to 14.7%, including UK pounds, Japanese yen, Canadian and Australian dollars, as well as Swiss francs.
According to the survey, the highest yield among the currency asset portfolios between June 2017 and June 2018 was demonstrated by the yuan at 3.2% per annum while the yield of the US dollar was 0.35%. Already the volume of foreign currency and gold assets of the Central Bank of Russia increased from US$40.4 billion to US$458.1 billion in the same period.
With regard to US sanctions and attempts to use the dollar as an instrument of pressure, at the end of November, Russian President Vladimir Putin remarked that the US “is not shooting its own foot, but rather a bit higher.”
“We do not aim to get away from the dollar, we are forced to do that. Let me assure you, let’s do this… We just do not want to do anything sudden that will harm us… we’re not leaving the dollar, the dollar is leaving us,” Putin said.
The Russian leader’s comment came after the chairman of Russia’s second largest bank, the VTB, had tabled a de-dollarization plan that was well received by the Russian Finance Ministry, stipulating a gradual shift to bilateral trade with several countries in its own currencies.
Moscow explained that the main motivation behind the move is to stimulate economic growth and protect the economy from US sanctions.