De-dollarization accelerates: Russia continues to reduce investments in US Treasury bonds

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MOSCOW – Amid its policy of dedollarization, in April 2019 the Russian Central Bank got rid of $1.6 billion of US government bonds, reducing its investments in that asset by about 87 percent in just one year.

In April 2019, Russia reduced its investments in US Treasury securities worth almost $1.6 billion, according to data released by the US Treasury.

That month, Russia’s securities fell from $13.72 billion to $12.14 billion. The list of the top 30 public debt holders published by the US Treasury Department no longer includes Russia.

In the last 12 months (from April 2018 to April 2019), Russia sold about 87% of its US Treasury bonds. The value of securities sold reaches $84 billion.

China continues to be the leader of the ranking, with bonds worth $1.13 trillion. Japan is in second place with $1.06 trillion. Brazil ranks third, with bonds valued at $306.7 billion.

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The decision by Deutsche Bank, Citigroup and the Bank of England to hold Venezuela’s gold is a political decision, analysts Pye Ian and Mehmet Ozkan said: banks hold back Venezuelan bullion because the US wants to corner the president Nicolás Maduro and replace him with Juan Guaidó.

On June 4, Bloomberg reported that Deutsche Bank confiscated 20 tonnes of gold from Venezuela for the alleged breach of payment of the $750 million loan received in 2016. Although the contract is due to expire in 2021, the bank rescinded the contract early payment due to non-payment of interest. In the same vein, in March 2019, Citigroup bank seized Venezuelan gold.

Analyst Pye Ian believes the contract was terminated prematurely”to further undermine Venezuela’s credit repayment reputation and sovereign ratings, while Juan Guaidó is presented as the alleged guarantor of Venezuela’s default settlement.

Pye also stressed that in the case of Venezuela, gold is not only the main financial asset, as designated by the Bank for International Settlements, but also a key monetary asset to free itself from the dollar standard as reserve currency and the global oil monopoly .

Mehmet Ozkan, a member of the American think-tank Center for Global Policy, agrees with Ian. For him, the latest US actions are part of efforts to corner President Nicolás Maduro and the Venezuelan government economically.

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