ST. PETERSBURG, June 3. /TASS/. Abandoning the dollar in the structure of the National Wealth Fund (NWF) will not allow Russia to completely get rid of risks, Vladislav Onishchenko, head of the Center for Strategic Research (CSR), told TASS on the sidelines of the St. Petersburg Intrenational Economic Forum (SPIEF).
"It is very unclear. A month term [for the withdrawal of the dollar from the structure of the NWF] looks very short. Strategically, we reduce risks, but we do not completely get rid of them. We still need to establish a permanent mechanism to prevent dollars from getting into the NWF," Onishchenko noted.
He recalled that the main source of replenishment of the NWF is the oil and gas sector, and most of the payments for energy supplies are still in dollars.
"Therefore, the influx of currency into the country, namely dollars, will still be, and in this sense, these risks will constantly exist. This should not be a one-time action then, but some kind of a system," the head of the CSR believes.
He stressed that the decision to abandon the dollar in the structure of the NWF is based on two goals: to weaken in sanctions risks and dependence on a specific currency.
"Any NWF deposits or NWF storage in dollars in one way or another mean that settlements go through American banks. Wherever they are, settlements still take place there," Onishchenko said.
Dumping the dollar can also be a political statement before the meeting of the presidents of the Russian Federation and the United States.
"In a sense, this can be generally a political statement before the meeting with [US President Joe] Biden. They can reconsider it," the head of the CSR suggested.
Abandoning the dollar from the structure of the NWF may not affect the ruble exchange rate, Onishchenko believes.
"On the one hand, we will sell dollars, but, most likely, it is impossible to do this inside the country. Most likely, it will be some kind of foreign exchange. This may not have an impact on the domestic foreign exchange market," he said
However, this decision raises questions about the value of the NWF.
"The transfer of a large or significant part of money, for example, into gold. Unlike the dollar gold is very volatile. This leads us to another problem. The point is that the final cost of the NWF is not clear. Therefore that now, if we measure the NWF in dollars, this is clear. If we measure it in gold, the price of gold fluctuates several times per year, unlike the [dollar] rate, which is more or less conditionally stable and does not have such volatility. That’s the problem," the head of the CSR concluded.
Changing NWF structure
Earlier, Finance Minister Anton Siluanov said on the sidelines of the St. Petersburg International Economic Forum that Russia plans to fully abandon the US greenback from the structure of the National Wealth Fund (NWF) and reduce the share of the British pound from 10% to 5% within a month.
The share of the euro in the NWF will grow to 40%, the yuan - from 15% to 30%, the share of the Japanese yen will not change and will remain at 5%. In addition, gold will also appear in the structure of the NWF, and its portfolio will be 20%.
About SPIEF
The St. Petersburg International Economic Forum, organized by the Roscongress Foundation, is held on June 2-5. This year SPIEF’s motto will be "Together Again - Economy of New Reality". The event will also include forums for the Small and Medium-Sized Enterprises (SME), Healthy Life, Drug Safety as well as SPIEF Junior, Inner courtyard Penal discussion. SPIEF-2021 is held in a face-to-face format with all anti-coronavirus measures observed. TASS is the official photo hosting agency and information partner of the event.