Russia Turned $101bn into Yuan, Euro Since Last Spring: Central Bank

Russia’s central bank dumped $101 billion in U.S. holdings from its reserves, shifting to euros and yuan since last spring amid a new round of U.S. sanctions, Rossiyskaya Gazeta reports.

The Bank of Russia moved the equivalent of $44 billion each into the European and Chinese currencies in the second quarter, according to a report published on Wednesday by the central bank, which discloses the data in six-month periods. Another $21 billion was invested in Japanese yen, the report said.

The Chinese currency accounted for 15 percent of total holdings at the last reading, up from 5 percent at the end of the first quarter, according to the report. That puts Russia’s yuan share at about ten times the average for global central banks, with its total holdings of the currency accounting for about a quarter of world reserves in yuan, according to International Monetary Fund (IMF) data.

“Russia is making a strategic shift in its reserves towards holding fewer dollars and more assets in other currencies,” said Benn Steil, director of international economics at the Council on Foreign Relations in New York.

Tough sanctions on major Russian companies in early April hammered the ruble and spurred fears that more restrictions could follow, such as measures to cut Moscow off from global payment systems. Russian holdings of U.S. Treasuries dropped by about $81 billion in May and June, according to U.S. data.

Russia isn’t alone in its bid to reduce reliance on the world’s reserve currency amid increasing attempts by Washington to use economic leverage for geopolitical means. China also sold a large portion of its U.S. Treasury holdings last year amid a deepening trade war with America, and officials in Europe put forward proposals to increase the use of the euro in regional transactions.