Russia seeks safe haven in gold, away from dollar and euro (Source Ria Novosti) Russia is taking steps to ensure that it protects itself from any future dollar or euro sanctions. Moscow boasts the world’s 5th biggest foreign exchange reserves and the 6th largest gold reserves. In total, the assets amount to over $1.5 trillion. While the West is continuing to try and punish Russia via economic sanctions, the response of the Russian Central Bank has been to diversify away from the euro and dollar – and to buy up more gold.
As the geopolitical situation in Ukraine deteriorates, Russia is moving to protect itself from currency risks associated with the euro and the greenback. In the first half of 2014, Russia’s Central Bank reduced its foreign currency reserves by 2.5 percent. “Due to the worsening geopolitical situation, the Central Bank actively redistributed foreign exchange reserves, replacing US Treasury bonds with gold,” Alfa Bank’s chief economist, Natalya Orlova, told Kommersant. Instead of buying euros and dollars, Russia’s Central Bank is eyeing the Chinese yuan and the Japanese yen. Boosting currency swaps and bilateral payments with China and other strategic trade partners will continue to bypass the US dollar.