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Russia to replenish rainy-day fund in yuan – finance ministry

The National Wealth Fund, which accumulates revenue from the country’s energy exports, has been growing this year

Russia’s Finance Ministry intends to replenish the National Wealth Fund (NWF) in Chinese yuan starting from next year as part of its budget rule, the head of the ministry, Anton Siluanov, has revealed.

The fund, which accumulates revenue from oil exports, is part of Russia’s federal budget assets. It was created to support the national pension system, and the funds can also be used to cover budget deficits in times of crisis. The assets of the fund amounted to $186.5 billion as of December 1.

In 2020, the ministry proposed diversifying the assets of the National Wealth Fund, allowing part of them to be held in precious metals, particularly gold.

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“From January next year, the [new] budget rule will work…We will make an assessment of monthly indicators. Accordingly, we will make a decision on replenishing or not replenishing the NWF and in what currency: in rubles, in yuan, and so on,” Siluanov told reporters on Tuesday.

“In order to hedge exchange rate risks, we always did it in foreign currency. Among the currencies of friendly countries, the yuan has the characteristics of a reserve currency and sufficient liquidity on our domestic foreign exchange market to the greatest extent. Therefore, the NWF will be replenished in this currency,” the minister explained.


READ MORE: Yuan squeezing out dollar on Moscow Exchange

In November, Russian President Vladimir Putin signed into law a new budget rule to accommodate higher spending for 2023-2024. Under the law, the volume of basic oil and gas revenues that can be spent on expenses in 2023-2025 will amount to eight trillion rubles ($114 billion).

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December 30, 2022 at 04:35PM
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