True value. The Bank of Russia to replace the dollar in foreign exchange reserves

© RIA Novosti / Natalia to Seliverstova in fotobanka the building of the Central Bank of the Russian FederationTrue value. The Bank of Russia to replace the dollar in foreign exchange reserves© RIA Novosti / Natalia to Seliverstova the image Bank

The Bank of Russia for the year increased the share of Chinese assets in foreign exchange reserves 48 times. Turkey’s purchase of Russian wheat for rubles, while the Russian oil export contracts translate from dollars to euros. About the future prospects of de-dollarization of the economy and about what will happen with the ruble — in the material RIA Novosti.

Shake-up of reserves

By the end of the first quarter of this year relative to 31 March 2017, the share of gold reserves of the country in cash RMB and Chinese bonds rose from 0.1% to 4.8%, gold 16.4% to 17.2%.

That is, the yuan and gold accounted for almost a quarter of the gold reserves. Thus from 32.4% to 29.4% decline in the proportion of US assets, like almost all other countries, except Germany (an increase from 10.6% to 12.9%).

Thus, the yuan has become the fourth largest currency reserves of the Central Bank after the dollar, Euro and sterling, just a year ahead of the Australian and canadian dollars.

The Chinese currency brought to the Central Bank the greatest profit of 2.17% per annum. Dollars — 0.48% while investments in the Euro and British pound lost (minus 0.5% and 0.23% per annum, respectively).

The total assets of the Central Bank in foreign currencies as of March 31 of this year reached $ 460 billion, having increased by 57,2 billion, i.e. almost 15%.

The Central Bank publishes reports on the structure of foreign exchange reserves with a six-month delay, because this information is very sensitive foreign exchange market. So these data do not take into account the large sales of us government bonds in the second quarter.

There is no doubt that to date in the foreign exchange reserves of Russia, the share of US assets have declined further, and the Chinese increased.

Do you have a plan?

All the evidence suggests that Russia is seriously preparing to reduce dependence on the dollar. As has informed yesterday a press-service of the government, we are working on the financial-economic bloc of the Cabinet of Ministers. To solve his supposed «including through the creation of incentives and mechanisms for the transition of foreign trade settlements in national currency».

It is expected that in mid-October, Prime Minister Dmitry Medvedev finally approved the bill on measures to de-dollarization of the Russian economy.

As said the head of VTB Andrey Kostin, «this plan is absolutely long-term and focus more on changing trends of the world than for a short-term disposable solution.» According to him, work to reduce the use of U.S. currency in the calculations will take «at least five years.»

The Cabinet of Ministers plans to introduce a ban on the circulation of the dollar or any restrictions on dollar payments. «Is not discussed», — noted in a press-service of the government.

The primary program goal of de-dollarization — to establish convenient mechanisms to help the business without unnecessary losses to make payments in any currency given the fact that the main trading partners of Russia are China, the EU and the countries of the EEU.

In other words, the government wants to transfer most of the foreign trade settlements in yuan, euros or rubles (when it comes to EAEU).

It needs to solve a number of technical issues — for example, at the level of Central banks to create mechanisms for the exchange of foreign currency liquidity directly, without trading. However, the first steps for the abandonment of the dollar are made already now.

Loans, oil, wheat

Increasingly refuse from the dollar in international borrowing. After U.S. threats to introduce sanctions against the state debt of Russia and Turkey in these countries increasingly issue debt securities denominated in the yuan, based on Chinese investors.

So, in the summer, when us sanctions had collapsed, the Turkish Lira, Ankara asked for help to Beijing and posted on the Shanghai stock exchange Turkish bonds in the Chinese currency.

Russia and China have already agreed on the sale of Russian bonds in rubles on the Shanghai stock exchange, but recently, the authorities of St. Petersburg announced plans to issue regional bonds denominated in Renminbi — they will offer to Chinese investors.

From the dollar and refuse in commercial contracts. Last week, the «Surgutneftegas» (the third place among Russian companies by oil production) invited other contractors to move to settlements in euros.

And last Tuesday, the Turkish newspaper En Son Haber reported that Ankara intends to purchase from Russia of 30 thousand tons of wheat, with payment in Russian currency — to 17 thousand rubles per ton.

It is clear that it is only a trial delivery, only for the last three months Russia to Turkey exported 1.2 million tons of wheat. After all the details of ruble payments on this contract, both countries are able to use their national currencies in commercial contracts of all sizes.

As sociologists testify, to the rejection of the dollar is better prepared today ordinary Russians. According to results of poll VTSIOM, two thirds (66%) of people keep their savings in rubles, the savings in dollars is only one in twenty Russians.

«The dollar, once the symbol of reliability savings, in the view of most Russian citizens lost that status,» concludes the pollster VTSIOM Kirill Rodin.

The skepticism toward the dollar seems justified. The declining demand of participants of foreign trade deals will put downward pressure on the exchange rate of the us currency in the coming months.

Cooling of investor interest in the debt securities of the United States, what evidence is disastrous auctions of two-, five — and seven-year bonds last week, dramatically exacerbating the problems of U.S. public debt and budget deficit. Making more real the prospect of a new large-scale crisis in the country.

As reported on Tuesday, the U.S. national Association of business Economics (NABE), 56% of the surveyed experts predict the beginning of a new crisis in the second half of 2020, 33% in 2021, and 11% believe that we will see the collapse of the American economy next summer.