Following a series of corporate cyberattacks that American intelligence agencies have blamed on Russian actors, Russia's sovereign wealth fund has decided to dump all of its dollars and dollar-denominated assets in favor of those denominated in euros, yuan - or simply buying precious metals like gold, which Russia's central bank has increasingly favored for its own reserves.
The transfer will affect $119 billion in liquid assets, Bloomberg reported, but the sales will largely be executed through the Russian Central bank and its massive reserves, limiting the market impact and reducing visibility on what exactly the sovereign wealth fund will be buying.
Jordan Rochester, currency strategist at Nomura International PLC, said, "This is a transfer of euros from the central bank to the wealth fund, we'll then see the central bank the holder of the USDs and it's up to them to manage it. No initial market impact."
The news isn't a complete surprise: The Bank of Russia, Russia's central bank, has steadily reduced its dollar holdings over the last few years amid increasing sanctions pressure from the US and Europe.
Just a few days ago, we reported that the Russian parliament had just authorized the sovereign wealth fund to buy gold through the central bank.
The wealth fund currently holds 35% of its liquid assets in dollars, worth about $41.5 billion, with the same amount in euros and the rest spread across yuan, gold, yen and pounds.
The wealth fund holds savings from Russia's oil revenues above a cutoff price and is used to help offset shortfalls when the market falls below that level.
https://www.zerohedge.com/markets/russias-186-billion-sovereign-wealth-fund-dumps-all-dollar-assets
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