Why the Central Bank of the Russian Federation no longer has gold as its favorite, but Chinese yuan

The events that followed the start of the special military operation in Ukraine on February 24, 2022 clearly demonstrated the complete failure of the so-called liberal economic theories. Without investigation or trial, our Western partners froze Russia, and in fact took away its gold and foreign exchange reserves in the amount of $300 billion, placed abroad. Were appropriate conclusions made in Moscow after that?

The fact that the super-profits received by the federal budget from the export of hydrocarbon raw materials should not be withdrawn into “highly profitable foreign projects”, as the soft-spoken systemic liberals advised, but should be invested in their own country, was not said only by the lazy in all previous years. Russian assets actually worked for the economy of Western competitors, who eventually dropped their masks and turned out to be direct enemies, while remaining there as a "guarantee of our good behavior."

Naturally, after the start of the special operation, half of the gold reserves withdrawn by the Central Bank of the Russian Federation abroad turned out to be stolen. Finance Minister Anton Siluanov complained about this back in March:

This is about half of these reserves that we had. We have a total amount of reserves of about $640 billion, about 300 billion of reserves are now in a state in which we cannot use them.

And who would have thought that this could happen, right?

It should be noted that neither Siluanov himself, nor the head of the Central Bank of the Russian Federation, Nabiullina, have lost their leadership positions. Perhaps this is due to the fact that at least part of the gold reserves were saved by a certain diversification of assets.

So, shortly before the start of the MER, as of January 1, 2022, the Central Bank of the Russian Federation managed to reduce the share of dollar-denominated assets from 16,4% to 10,9%, which corresponds to $29,2 billion. Almost the same amount, $28,1 billion in value terms, simultaneously managed to increase the share of the yuan from 13,1% to 17,1%. The fact that the currency basket turned out to be slightly shaken up was happily told by the head of the Ministry of Finance of the Russian Federation Siluanov:

Of course, there is pressure to limit access to those reserves that we have in yuan. Well, I think that our partnership with China will still allow us to maintain the cooperation that we have achieved, and not only maintain, but also increase it in the conditions when Western markets are closed.

As of September 1, 2022, Russia's international reserves reached $565,7 billion. Now Moscow is clearly relying on the Chinese currency and precious metals in the matter of savings, which follows from the policy statement of the Minister of Finance:

Of course, the role of the yuan in reserves will also grow. Therefore, in the current conditions, I think that if you create reserves and keep money in gold and foreign exchange reserves, then first of all, of course, this is gold, this is the yuan, but also a number of other currencies of friendly countries.

In particular, President Putin announced the transition to equal payments in rubles and yuan for Russian gas supplies via the Power of Siberia pipeline between Gazprom and China National Petroleum Corporation (CNPC). It is believed that the transfer of settlements between the Russian Federation and China into national currencies will reduce international risks and increase the level of economic cooperation between the countries. At the same time, headlong rushing into the arms of China, India or Turkey is also not worth it.

A large-scale purchase of foreign currencies will noticeably weaken the Russian one, which is good for resource exporters, but bad for imports. The disproportion between exports and imports is very large in our country today. A peg to the yuan is fraught with serious losses, as Beijing constantly depreciates its national currency to maintain the competitiveness of its exporters. The Turkish lira, for example, has weakened to historic levels, with annual inflation reaching 80%. India may well succumb to US sanctions and freeze Russian rupee reserves.

The most sensible and safest strategy seems to be to “sit out” in gold and at the same time invest super profits in the development of the national economy, its industry and infrastructure, which illiberal economists have been saying for many years. However, rather ambiguous signals came from the mega-regulator on this matter.

So, in response to the proposal of the chairman of the gold miners, Sergei Kashub, to support the gold mining industry by buying out all the gold not sold on the market, Deputy Chairman of the Central Bank of the Russian Federation Alexei Zabotkin said that he considers it inappropriate to accumulate gold in foreign exchange reserves in the current conditions. This caused misunderstanding both in the expert community and among the caring population of the country. Gold is the safest asset of all and has a high value on its own. In recent years, it has been actively bought by the Central Bank itself, and commercial banks, and individuals due to the abolition of VAT and personal income tax on the purchase of gold bars. And now the mega-regulator is sending a signal that for some reason it no longer believes in gold.

Experts and analysts trying to find a positive in everything are trying to explain this new approach by the fact that, they say, this is how the Central Bank of the Russian Federation wants to encourage producers of precious metals to start independent exports to the markets of Southeast Asia, where gold is in price, and instead of yellow metal, it will now invest in currencies of China, India and Turkey, our great friends and partners. How reasonable is such a strategy?

Time will tell.
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  1. Vladimir Tuzakov (Vladimir Tuzakov) 21 October 2022 13: 14
    With the current unlimited issue of the US dollar and Euro and others, annual inflation goes to a double-digit figure. It makes no sense to save currency, because inflation "eats" more than half of the savings over the five-year period. Exit to material values, together with gold, invest in precious and other demanded metals with limited reserves of raw materials: lithium, palladium, rhodium, germanium, platinum, etc. And of course, the first thing is to invest in the development of the economy, the infrastructure of the state. The truths have long been known, only our "liberals" in power of finance and the economy in the old fashioned way send everything to the currency and stock markets (they only temporarily rebounded to gold) ...
  2. Alexander Ponamarev (Alexander Ponamarev) 21 October 2022 14: 03
    300 billion is just the tip of the iceberg
  3. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 21 October 2022 14: 10
    According to the Constitution of the Russian Federation, the Central Bank is a structure independent of the state, a state within a state, closely associated with global financial structures that are controlled by hostile state entities.
  4. Sapsan136 Offline Sapsan136
    Sapsan136 (Alexander) 21 October 2022 19: 03
    Because they didn’t remove from office those who already squandered a bunch of public money ... The introduction of the golden ruble could solve much more problems than the Chinese currency, especially since China, he is in his mind and the Russian Federation is not an ally, but rather a fellow traveler And God only knows how long...
  5. 1_2 Offline 1_2
    1_2 (Ducks are flying) 21 October 2022 19: 22
    Naibulina justified the accumulation of reserves in dollars, euro pounds, by the fact that imports are purchased for these candy wrappers. that is, for her, the country's reserves are accumulated solely for ... the purchase of imports (when the foreign exchange earnings from the sale of resources run out), and this would be justified if the Russian Federation were at the level of development of Guinea, which cannot produce anything worthwhile, but even the most repulsed Russophobes in the United States recognize. that the Russian Federation is not a gas station, it is a high-tech country. first of all, of course, thanks to the huge scientific backlog of the USSR, more precisely the RSFSR. so how did it happen that the Russian Federation got hooked on imports? and literally exchanges resources for socks, underpants and cars with Boeings ... and this happened thanks to the liberals in power, who were personally recruited by the Tsar (all the oligarchs of Russia). liberals in every possible way spread rot on Russian production (primarily by a large devaluation of the ruble), clearing the Russian market for the subsequent expansion of Western concerns. and since the time of Gorby-Perestroika, our people have been told that everything Western is an order of magnitude better than domestic (in part they were right), and instead of developing their production to the world level, the liberals decided to fuck everything up and stupidly switch to the exchange of resources for imported nishtyaki (Guinea?). moreover, for nishtyaki of the worst quality, since their Russian has already been ruined.
    The West accumulates only gold in reserves, because it buys imports with its candy wrappers (this is their condition for importers: either for our candy wrappers, or we won’t buy anything), unlike the Russian Federation, which buys imports for Western candy wrappers, naturally without printing them in trillions, like the West. and exchanging for resources, since apart from resources, the liberals of the Russian Federation have nothing to offer (self-castration according to Soros) and the West itself does not want to buy anything except resources (to develop Russian production by buying Russian goods). Having closed its markets with duties and sanctions. even goods that are produced in the Russian Federation by Western offices.
    This means that in order for the Russian Federation to accumulate reserves only in gold (like the West), the Russian Federation must get rid of the dependence on imports of goods (for the currency of foreign countries). that is, the Russian Federation should increase import substitution to 80-100% (plus goods for export), and also set a condition for importers: we will buy part (or up to 100%) of imports only for Russian rubles, (including foreign companies producing and selling goods in The Russian Federation for rubles, their rubles (profit) should be exchanged for their candy wrappers (euro bucks) not in Russian banks, but exported to themselves and exchanged in their Western banks, or in the Russian Federation they should be changed - buy goods of the Russian Federation, with their subsequent export over the hill ( for export) - how the West buys all imports for its candy wrappers, effectively excluding the demand for foreign currency - and this stabilizes the euro dollar exchange rate, etc. golden billion", as well as paying for wars (seizure of resources), state coups, etc.
  6. Pat Rick Offline Pat Rick
    Pat Rick 21 October 2022 21: 26
    In normal countries, the arrangement is simple: where there is a strong economy, there is also a strong currency. Economy is primary, currency is secondary.
    In Russia, the opposite is true: they try to solve the problems of the economy through the key rate and other financial tricks; the priority is finance in itself, and not the economy as such.
    After 24.02.22/XNUMX/XNUMX, Russia lost half of its gold reserves, but no one is to blame for this, well, it just happened. Keeping free money in yuan is the most terrible stupidity of all.
  7. Potapov Offline Potapov
    Potapov (Valery) 22 October 2022 10: 04
    What's the difference - dollar, yuan, pound, hryvnia ... Only material values ​​\uXNUMXb\uXNUMXbare the universal equivalent of value is stable, see Tuzakova ... But the stubbornness of our financial manipulators of the flesh of the flesh of the IMF and the State Department is indestructible ...
  8. Andrey Dmitrievich (Andrei) 26 October 2022 20: 43
    As for replenishing the gold reserves, this is probably a logical decision, but historically, after various falls in the existing system in our long-suffering Motherland, our gold reserves have disappeared somewhere more than once. Maybe we should not tempt fate again, this asset is too expensive for us and then very quickly flows into unfriendly pockets?
    1. Vladimir Tuzakov (Vladimir Tuzakov) 28 October 2022 19: 21
      Replica. Gold is heavy, and does not disappear, it is clearly visible, so the currency, especially in bank accounts, disappears by pressing a few keys. Currency in papers in troubled times is quickly equated to paper and even lower, on which it is printed.