What is behind the NWF's abandonment of the dollar in favor of gold, euro and yuan

In the very near future, the first face-to-face meeting of Presidents Joe Biden and Vladimir Putin is expected. And so, on the eve of this bilateral summit, the "raw materials semi-colony", which ill-wishers sometimes call our country, sent a serious political signal. The National Wealth Fund intends to get rid of all its assets in dollars, shifting them into European and Chinese currencies, as well as gold. This decision was announced on the sidelines of the St. Petersburg Economic Forum. So what is the “message” Moscow would like to convey to Washington?

Let us recall that the NWF is formed from the super profits from the sale of Russian oil for export at a price of over $ 40 per barrel. Everything from above is withdrawn and stored in the state reserve fund, being decomposed into various low-risk assets, including those abroad. The NWF's policy has often been well-deserved criticism for serving as a kind of financial pump that siphons money from the domestic economics and directing them to the economies of Western countries competing with us. And there really is a very large grain of truth in this. But recently, quite serious transformations have begun to take place with the fund. First, it was announced that its liquid part, exceeding 7% of GDP, would be invested in Russian infrastructure projects, which we will discuss in detail. told earlier. Now the turn has come to its complete "de-dollarization". What does this mean?



Today the structure of the NWF is as follows: shares of 35% in it are occupied by the dollar and the euro, respectively, the yuan - 15%, the British pound - 10%, the Japanese yen - 5%. After the promised transformation, the European currency will have 40%, the Chinese - 30%, the pound and the yen - 5% each, and the share of gold will grow to 20%. This is really called "de-dollarization" not in words, but in deeds. Why was this done now, when journalists and cameras of all international news agencies are sensitive to every spoken word? Here is what President Putin's press secretary Dmitry Peskov said:


Yes, this is a political declaration and a purely political decision. All over the world in the Kremlin they say that the financial base in the form of the dollar that everyone needs, on which the "hegemon" stands, is gradually shaking. But then what will replace the "American"? Not our "wooden" ones? No, of course not. The Russian ruble is still very, very far from the status of a world reserve currency. But there is the euro, there is the yuan, there is gold. And I would like to talk about this in a little more detail.

If you remember, we already reasoned on the theme that the main goal of modern US foreign policy will be to stop or at least slow down the economic development of China, its main competitor. As part of this task, Washington needs to knock out potential allies around the Celestial Empire, block the "New Silk Road" from Asia to Europe, squeeze the Chinese out of their colonies in Africa and Latin America. To force the Kremlin to take a hostile or neutral position in relation to Beijing in the ongoing geopolitical struggle between the PRC and the United States is the main goal of Joe Biden's meeting with Vladimir Putin. And what is Moscow doing? Demonstratively gets rid of dollars in its international reserves and buys euros, yuan and gold. Thus, the Russian leadership shows Washington that it is not ready to blindly follow in the wake of American policy and will play its own game.

The story with gold is also interesting. Thanks to the active purchase of the yellow metal, our country has risen to the fifth place in the ranking of its largest holders in the world and could have taken a place even higher. However, in 2019, the Central Bank made a very controversial decision, reducing the volume of gold purchases. Russia is one of the leading gold mining countries, and the Central Bank of the Russian Federation is its main domestic consumer. But in May 2019, the mega-regulator introduced a discount for the purchase of precious metal for itself, and it became more profitable for manufacturers to sell it abroad. Gold exports instantly jumped sevenfold, and it went to the capital of Great Britain, London, the famous gold hub. In April 2020, the Central Bank decided to suspend the purchase of the yellow metal altogether with the following wording:


Well, apparently, the situation has really changed seriously, if instead of the "green paper" printed and cut in the United States, Elvira Nabiullina's department is ready to buy Chinese and European currencies, as well as gold, the eternal measure of value.