Russia's international reserves continue climbing, topping $600.9bn in May, the country's highest level ever, as oil prices have recovered, according to the Central Bank of Russia (CBR). The previous record of $598.1 billion was reached in August 2008, just before the global financial crisis hit.
“Foreign exchange reserves rose by $7bn, or 1.2%, over a week through May 21, and totalled $600.9bn,” the regulator said in a statement. In 2020, the value of Russia’s total international reserves, including gold, amounted to $596 billion .CBR last year intervened sparingly in forex markets, allowing markets to largely define the ruble’s external value.
Russia’s international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies, and Special Drawing Rights (SDR) assets.
(Source: Central Bank of Russia)
Moscow has almost doubled its international reserves over the last five years, after they fell to a post-2008 low of $356 billion in April 2015 as the Kremlin tapped its rainy day funds bailing out the economy during the 2014 oil price crisis.
Since then holdings have been steadily growing as the Central Bank has been focused on rebuilding reserves back to what Governor Elvira Nabiullina has called her “comfortable level” of about $500 billion, a mark that was passed in June 2019.
In June 2015, reserves stood at $357 billion. In 2020, growth totaled $43 billion, while in 2019 and 2018, it was nearly $86 billion and around $33 billion respectively.
Russia has been actively reshaping its international holdings, cutting the share of the US dollar in favor of other currencies and gold.
The share of US dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) survey.
Some analysts say this partly reflects the declining role of the US dollar in the global economy, in the face of competition from other currencies used by central banks for international transactions. If the shifts in central bank reserves are large enough, they can affect currency and bond markets.