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Russia again raises USD share in its reserves
Russia again raises USD share in its reserves

Sometimes it is really difficult to admit mistakes. That is why the Russian mass media said that the national central bank was simply disappointed by the Chinese yuan as a reserve currency. Both the yuan and the euro failed to replace the US dollar as a reserve currency. The fact is that gas and oil prices are denominated in the US dollar. Moreover, both buyers and sellers prefer this particular currency.  Thus, under the current conditions, it is impossible to refuse to use the American dollar. Of course, the regulator may reduce the share of the US dollars in its international reserves or transfer the finance to other assets. However, to perform any operation, the Bank of Russia will have to buy the US dollars again thus losing a lot of money due to a difference in exchange rates. The fact is that when the regulator decided to make reserves in the yuans, the share of the US dollars was still bigger. At the moment, the share of the yuans is slipping again. According to the reports provided by the central bank, it lost almost $7 billion because of the yuan depreciation. In 2019, the regulator’s losses totaled 182.5 billion rubles. In the previous two years, the losses hit record highs of 435.3 and 434.7 billion rubles. Thus, during the last three years, the central bank’s budget dropped by more than a trillion of rubles. The last time the Bank of Russia made a profit was in 2016. 

Published: 2020-05-22 13:27:28 UTC
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