Russia’s Reserves Hit $557 Billion, Surpass Pre-Sanctions Peak

Just $11 billion of that is in dollars

Russia’s gross international reserves (GIR) topped $557.5bn on January 10, according to the Central Bank of Russia (CBR), surpassing the previous all-time high recorded in 2008.

Russia’s reserves have been rising steadily since the crisis of 2014 began with the collapse of oil prices and a subsequent deep devaluation of the ruble.

The CBR had been following an informal policy to build up reserves to its “comfort level” of $500bn and passed that milestone for the first time in five years in June.

At the same time the CBR has slowed the pace of its accumulation of gold. The central bank has run a policy of building up gold as a share of its reserves since 2007, but it clearly has reached a point where this comfort level has also been reached.

After spending an estimated $40bn on the precious metal in the past five years, the central bank is starting to rein in spending – it bought 149 tonnes of gold in the first 11 months of 2019, 44% less than the year before. Annual purchases are expected to be the lowest in six years.

And finally the CBR has returned to the US debt market after selling off much of its holding in US treasury bills last spring. With excess reserves the CBR has been looking for investments.

Russian holdings of US debt increased by $794mn in November 2019 to $11.491bn, including $8.512bn worth of short-term securities and $2.979bn worth of long-term securities, according to the data provided by the US Department of the Treasury as cited by Tass.

As a result of the build-up of this cash pile Russia can now cover its external debt dollar for dollar in cash. In 2019, Russia’s total foreign debt increased by 5.9% to reach $481.5bn. However, in the same period, foreign reserves jumped from $468bn to $554bn, a rise of 18%.

“Russia’s international reserves-to-total external debt ratio rises to 115% by end 2019 and is expected to grow further on continued FX buying under fiscal rule,” tweeted Ivan Tkachev, the economics editor at RBC. “Among major emerging economies Russia is second only to China under this metric.”

Source: bne IntelliNews

  1. […] Reserves Hit $557 Billion, Surpass Pre-Sanctions Peak bne IntelliNews via […]

  2. cechas vodobenikov says

    Germany, not sanctioned, has a contracting economy; since 2014 when sanctions were imposed, the Russian economy has grown by approx 2% each year

  3. thomas malthaus says

    More than a little curious as to what Russia will do with the last $11 billion
    in US fiat.

    1. Robert Happek says

      $11 billion is not really that much. That is roughly $100 per capita of the Russian population. I think Russia wants to minimize its risk and, at the same time, maintain a certain level of good will towards the US. They are not likely to drive their Dollar position to zero. After all, the US Dollar is still the most important international reserve currency. And it will stay that way for years to come.

    2. rightiswrong rightiswrong says

      Rocket research.

      Designing a capsule for fat b’stards.

  4. Roger Bratt says

    >> Just $11 billion of that is in dollars

    That is some VERY FVCKING GOOD NEWS !!!

    The key to stopping American Terror – short of confronting the US militarily –
    is to de-fund it.

    And that’s what Russia has done by reducing their $$ reserves.

    GO RUSSIA !!!

    PS Can I trade 30 ounces of Silver for an ounce of Palladium ?

    1. ddduke says

      Hard to defund the US when the Fed can create unlimited dollars with a keystroke. The fall will happen when the rest of the world stops using the U$D for trade. Russia and China are a good start.

  5. Brion Adair says

    Too ironic. Proves that if Putin was the US President we’d be in the black instead of trillions in the red.

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