Russia is shifting its investment preference gears. Moscow is decreasing its funding of America’s national debt, so U.S. government bonds may be replaced by deposits into banks of more friendly countries or investments in gold, according to experts interviewed by Izvestya.
Reducing investment in U.S. debt fits into the logic of the so-called “de-dollarization.” However, such investments are formed based on the import structure: a country should have access to money in the currency that it uses most actively, the newspaper wrote.
For almost 10 years, Russia has been one of the most significant investors in U.S. government debt, in 2010-2011 Russian investments reached $180 billion. These investments have never been stable, yet this year’s decline is unusually sharp. Currently, the Central Bank holds securities to the tune of just $14 billion and is not even one of the top 35 leading investors.
Finding an adequate replacement for U.S. treasuries will not be so easy, since there are not many alternatives. The problem is that the structure of foreign trade and the debt load of banks requires a large amount of dollars, Managing Director for Macroeconomic Analysis and Forecasting at Expert RA Anton Tabakh told the paper. In addition, there are few reliable and liquid dollar instruments other than U.S. government debt. That is why China and Japan are holding huge amounts of money in the form of U.S. government securities, the expert explained.
Taking into account the de-dollarization course of the Russian economy and the campaign of international trade in national currencies, investments from the U.S. government debt can be transferred to both the currencies of “friendly” partners, such as Asian countries, and Eurozone currencies that are safer for Russia, BCS Premier analyst Anton Pokatovich told Izvestia.