Kremlin dollar dump is economic inflatable hammer – Reuters
- Date: 04-Jun-2021
- Source: Reuters
- Sector:Financial Markets
- Country:Middle East
Kremlin dollar dump is economic inflatable hammer – Reuters
Moscow has blown an economic raspberry at Washington. Russia's $186 billion National Wealth Fund is exiting greenback-denominated investments amounting to 35% of its total assets, according to Finance Minister Anton Siluanov. It's a bolshy political signal to Washington, which is banning its banks from buying rouble-denominated Russian state debt from June 14. It's also consistent with the Kremlin's ambition of undermining the greenback's status as the world's reserve currency.
Yet it won't hurt Washington. Some $7 trillion of world central bank reserves are held in dollars, more than half of the total, according to the International Monetary Fund. While that ratio has been ebbing, dollars remain popular as reserves because they're a safer long-term bet than most other currencies. By shunning them, Siluanov is depriving the NWF of a useful hedge while inflicting minimal damage on Russia's old Cold War adversary. (By Dasha Afanasieva)
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