National Wealth Fund: Russia To Cut Share Of US Dollar

By Bimbo Ogunnaike with agency report

Russian Deputy Finance Minister, Vladimir Kolychev, has disclosed on Wednesday that the country will reduce the share of  US dollar in its National Wealth Fund and is considering investing in other foreign currencies including the Chinese yuan.

The changes to the structure of the National Wealth Fund, which is part of Russia’s sovereign reserves, will come into effect next year, Kolychev said.

“I can say with certainty that the US dollar share will be smaller. Different currencies are being considered… including the yuan,”Kolychev told reporters.

Russia has stepped up what it calls a de-dollarization process to reduce its dependence on the greenback when Western countries began imposing sanctions on Moscow over Ukraine in 2014.

According to Kolychev,  the move was in part meant to shield Russian reserves from external risks, but did not give any indication how drastically the US dollar share of the National Wealth Fund would be cut.

“Geopolitical risks are one of the key factors in determining the structure of the National Wealth Fund,” he said, adding that the finance ministry was trying to bring the structure of the National Wealth Fund closer to that of the central bank’s foreign currency reserves, where euros account for a larger share than the dollar.

The National Wealth Fund had $45.5 billion US dollars, 39.17 billion euros and 7.67 billion pounds as of the end of September, according to data from the finance ministry.