Lost billions: rejection of the dollar left Russia sideways

According to Bloomberg’s calculations, refusing to use the American currency cost Russia about $ 7,7 billion in losses over the past year. Does this mean that the bet on the so-called dedollarization economics was the wrong decision?




Dedollarization is the process of phasing out the use of the US currency in settlements. This is a forced step, which even domestic liberals in the government took with a creak. After a sharp deterioration in relations with the United States of America in 2014, Russia has already received several servings of Western sanctions. However, the biggest problems are yet to come.

For example, the US Treasury may well put a ban on settlements in dollars, not only for Russian state-owned banks, but for the entire banking system as a whole. Experts estimate the likelihood of such a tough scenario in the near future is not too high, but to ignore such a threat would be extremely frivolous. because политическая expediency outweighs all economic reasons.

So, over the past year, the Central Bank of the Russian Federation reduced the share of the dollar in its reserves from 43,7% to 23,6%. In exchange, the regulator increased the volume of assets denominated in euros from 22,2% to 30,3%, and in RMB - from 5 to 14,2%. Such diversification had a high price.

At first, due to the constant devaluation of the Chinese currency, Russia's international reserves sank in value by many billions in dollar terms.

Secondly, settlements in national currencies increase transaction costs, explains financial expert Sergei Deineka:

Transaction costs in payments in a currency other than the dollar will mainly be associated with the costs of foreign currency conversion.


It is no secret that Russia increased the share of settlements in national currencies from China, which amounted to 17% with a total volume of over $ 100 billion over the past year.

Thirdly, the domestic regulator, investing in weaker currencies, received less profit due to the so-called “dollar rally”, whose growth reached 6,5%.

And this is all true. But to reduce dependence on the dollar you have to pay a fairly high price. And not only Russia alone is taking such steps. Due to constant economic pressure from Washington, many countries are also cautiously stepping out of the dollar, gradually lowering the level of pressure from the US Treasury.

In addition, Bloomberg analysts clearly deliberately kept silent about the fact that the qualitative diversification of Russian reserves brought not only losses, but also profits. As you know, the Central Bank is rapidly increasing its assets in gold. Due to the increase in the value of the precious metal, the regulator’s gain could, according to some estimates, be up to 100 billion in dollar terms. As they say, if it disappeared in one place, then it arrived in another.

In general, the de-dollarization carried out in our country cannot be measured in terms of profitable / disadvantageous. This is a matter of national security and economic sovereignty, for which you have to pay.
Photos used: https://antideza.ru/
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  1. Sapsan136 Offline
    Sapsan136 (Sapsan136) 16 October 2019 11: 02
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    Investing in the yuan is a rather forced and not so expensive measure due to the growth of trade with China, and here Russia even saves by paying directly to the yuan by China, without the cost of converting them into dollars and vice versa ... You can and should increase the purchase of precious metals by switching on electronic settlements in gold, and part of the funds can be invested in stable currencies of third countries, such as the Chilean peso, whose inflation is close to zero.
    1. 123 Offline
      123 (123) 16 October 2019 12: 37
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      In fact, you are right, only investing in the yuan is only partly a necessary measure, it is also a strategic course towards creating an alternative American financial system. "Electronic settlements in gold" is a distant prospect, maybe they will come to this. It is necessary to expand the "ruble zone" so that the ruble becomes a reserve currency.
      But the feasibility of investing in

      stable third-country currencies, such as the Chilean peso, whose inflation is close to zero

      doubtful. The task is not to protect reserves from inflation, but to organize trade without a dollar. Any pesos and tugriks will not help here. Who should they pay with? Their presence is justified only in a small amount comparable to the volume of trade with specific countries (pesos for Chile), sufficient for mutual settlements.
      1. Sapsan136 Offline
        Sapsan136 (Sapsan136) 16 October 2019 12: 59
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        Protecting reserves from inflation is also a worthy measure, since a good owner always has funds in circulation and serves as a reserve in case of negative developments.
        1. 123 Offline
          123 (123) 16 October 2019 15: 00
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          Protecting reserves from inflation is also a worthy measure.

          From the point of view of an ordinary person - certainly yes. Not sure what Nabiullina thinks in the same categories. winked
          1. Sapsan136 Offline
            Sapsan136 (Sapsan136) 16 October 2019 16: 52
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            Nabiullina generally rarely tries to bother her head with thoughts, judging by the state of the economy, industry, machine tool park and living standards of the indigenous population of Russia ... Topilin does not bother his head either ... These people got stuck in the 18th century ... They fill Russia with illiterate migrants and they believe that manufactories will once be able to bypass automated production lines in terms of quality and quantity of products ... Such thoughts give out to them either science-fiction writers, or outright pests.
            1. 123 Offline
              123 (123) 16 October 2019 22: 07
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              I’m not sure that the state of industry and the machine tool park are in Nabiullina’s competence and conviction

              that manufactories will once be able to bypass automated production lines in terms of quality and quantity of products

              hard to attribute to her. It is difficult to objectively evaluate its value, we simply do not possess the necessary information for this, but in general there are many questions.
              When I wrote that Nabiullina thinks in other categories, I meant that she adheres to the general strategic course for dedollarization and no one will mess with any pesos, the volumes are not the same. In yuan, if I am not mistaken, about 150 billion dollars are stored. For six months, due to changes in the exchange rate, we have 2 billion. These are the fluctuations. sad So, for the central bank, plus or minus 1-2 billion, nothing special. I doubt that they will invest comparable amounts in the peso in order to somehow compensate for the losses from inflation.
  2. Dzafdet Offline
    Dzafdet (Sergei) 17 October 2019 13: 34
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    Refusal of a deposit in dollars is a refusal to service US foreign debt. And this is only the pluses. Still, to force our government to invest in the economy of the Russian Federation, and not in vineyards in Italy ...
  3. Nikolay Malyugin (Nikolai Malyugin) 18 October 2019 07: 27
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    I don’t think that the US Treasury will ban our country from using the dollar in trading operations. Although our participation in this currency is small, but as they say, a hen is biting a grain. In general, finance is such a complicated concept that one cannot wishful thinking here.
  4. DimerVladimer Offline
    DimerVladimer (Dmitry Vladimirovich) 18 October 2019 09: 48
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    I have been working with the PRC in RMB for a long time - there are less costs for the purchase of foreign currency and the transaction is cheaper.
    But lately, Yuan has really depreciated as part of a trade conflict with the United States.
    However, from October 14-15, it is strengthening again, ostensibly against the background of agreements reached with the United States.
    So, some fluctuations, of course, will depreciate investments in the currency of the PRC, but this is not the point - here either support the economy of an unfriendly state, or a tactical partner, which is the PRC.
  5. Oleg Rambover Offline
    Oleg Rambover (Oleg Rambover) 18 October 2019 12: 40
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    Due to the increase in the value of the precious metal, the regulator’s gain could, according to some estimates, be up to 100 billion in dollar terms.

    Nonsense, the entire gold reserve in the Russian Federation is worth a little more than 100 billion. Yes, since last summer, gold has risen in price by 10-15 percent, but before that it has fallen sharply and still has not reached the maxima that were.
    By and large, there is no alternative to the buck and the euro and is not expected in the near future. Chilean peso is funny. Any attempts to get away from the dollar will cost Russia significant funds. Even if the calculations are carried out in nat. currencies, conversion is carried out through the dollar.
    In short, this story is from the category of "spite for mom frostbite ears."