Russia said it will eliminate the dollar from its oil fund to reduce vulnerability to Western sanctions just two weeks before President Vladimir Putin holds his first summit meeting with US leader Joe Biden.
The National Wellbeing Fund will shift its dollar holdings into euros, yuan, and gold, Finance Minister Anton Siluanov said.
The transfer, which affects about $119 billion in liquid assets of which about a third is held in dollars, will take place within the central bank’s huge reserves.
“The central bank can make these changes to the Wellbeing Fund without resorting to market operations,” said Sofya Donets, an economist at Renaissance Capital in Moscow.
Coming ahead of the June 16 Biden-Putin meeting, the move marks another milestone in the Russian leader’s drive to reduce his country’s dependence on the dollar after years of steadily increasing U.S. restrictions.
“They’re expanding sanctions and for us, the dollar is becoming riskier,” Deputy Finance Minister Vladimir Kolychev told Bloomberg.
Russia can make the change within a month, but it’s up to the central bank to determine whether to adjust the distribution of its overall reserve holdings, Siluanov told reporters at the St. Petersburg International Economic Forum.