Russia has officially announced that it will remove all U.S. dollar assets from its National Wealth Fund (NWF), a move that escalates the country's de-dollarization strategy amid intensifying Western sanctions. Finance Minister Anton Siluanov made the statement on Thursday at the St. Petersburg International Economic Forum, confirming that the changes will take effect within the next month.
Fund Composition Overhaul
According to Reuters, Siluanov told reporters: "Like the central bank, we have decided to reduce investments of the NWF in dollar assets." Under the new plan, the fund will hold 40% euro, 30% Chinese yuan, 20% gold, 5% Japanese yen, and 5% British pound. The dollar portion will be replaced by the euro, the yuan, and the pound.
The NWF, valued at approximately $600.9 billion as of May 27, forms part of Russia's gold and currency reserves and was originally designed to support the country's pension system. The overhaul represents a dramatic pivot away from the greenback, which has long dominated global central bank reserves.
Political and Economic Motivations
Timothy Ash, senior emerging markets strategist at Bluebay Asset Manager, called the decision "very political" and interpreted it as a signal to the Biden administration: "We don't need the U.S., we don't need to transact in dollars, and we are invulnerable to more U.S. sanctions." He noted that the move also suggests Moscow expects further sanctions from Washington.
Russian President Vladimir Putin has made de-dollarization a key policy aim to reduce the economy's exposure to U.S. dollar assets and to insulate the country from future punitive measures. Relations between Moscow and Washington have deteriorated sharply, particularly since the annexation of Crimea in 2014 and subsequent sanctions.
Broader De-dollarization Trend
In January, Russia's central bank reported that gold had surpassed the U.S. dollar in the country's reserves for the first time. Additionally, in August last year, reports indicated that Russia and China were cooperating to reduce their dependence on the dollar, with bilateral trade settlements in USD falling below 50%.
Analysts suggest that Russia's latest move could encourage other nations to diversify away from the dollar, potentially accelerating a long-term shift in the global monetary system. However, many experts believe the dollar's dominance will not be easily displaced, and Russia's actions remain largely symbolic given the scale of the U.S. economy and the depth of dollar-denominated markets.