For the first time, Russia's central bank holds more gold than U.S. dollars in its international reserves, according to a report published by the Bank of Russia. As of June 30, 2020, gold accounted for 23% of the country's $583 billion in reserves, while the U.S. dollar's share dropped to 22%, down from over 40% in 2018.
Reserve Composition Shifts Dramatically
The detailed breakdown shows a massive rebalancing: the euro made up about one-third of total assets, becoming the largest single component. The Chinese yuan represented 12%, reflecting Russia's strategic pivot away from dollar-denominated holdings. Gold's share climbed from roughly 17% in 2018 to 23%, now the second-largest category.
The increase in gold's proportion was boosted by a 26% surge in gold prices between June 2019 and June 2020. Additionally, the central bank purchased $4.3 billion worth of gold during that period.
From Top Buyer to Exporter Booster
Russia had been the world's largest gold buyer, spending over $40 billion on gold purchases over the past five years. However, the central bank stopped buying gold in the first half of 2020, aiming to encourage miners and banks to export more and bring foreign currency into the country.
Putin's De-Dollarization Strategy
Russian President Vladimir Putin has made de-dollarization a key national policy to reduce the Russian economy's exposure to dollar assets amid heavy U.S. sanctions. The multi-year effort has accelerated as relations with Washington deteriorated.
Russia is not acting alone. According to a report by Bitcoin.com last August, Russia and China have been collaborating to reduce their dependence on the U.S. dollar, with trade settlements in USD between the two countries falling below 50%. Both nations have promoted settlements in local currencies and the yuan, further weakening the dollar's dominance in international trade.
Analysts view Russia's reserve shift not only as a response to geopolitical pressure but also as a sign of a broader multipolar trend. As more countries explore de-dollarization, the U.S. dollar's share of global reserves may continue to decline.