Russia: "If US Sanctions Continue, We Will Not Accept Dollars for Oil Sales"... Also Reducing Dollar Assets

Russian Finance Minister Also Says "Reducing Dollar Assets in Sovereign Wealth Fund"
Countermeasures Taken as Hacking Issue Arises Ahead of US-Russia Summit
China's Digital Yuan Launch Expected to Accelerate De-dollarization

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The Russian government announced that it may reduce dollar-denominated contracts for oil exports and decrease the proportion of dollar assets within its sovereign wealth fund, drawing attention to the underlying reasons. This move is interpreted as a countermeasure in response to the U.S. hinting at retaliation against Russia following a series of cyberattacks ahead of the summit between the U.S. and Russian leaders. Some also predict that with the upcoming Beijing Winter Olympics next year, if the Chinese government officially launches the digital yuan, the de-dollarization between China and Russia will intensify further.

On the 3rd (local time), Alexander Novak, Russia's Deputy Prime Minister and Energy Minister, attended a session at the International Economic Forum (IEF) held in Russia and stated, "Russia has no intention of moving away from the international currency, the dollar, but if U.S. pressure continues, we cannot help but be tempted to gradually reduce dollar-denominated contracts for oil exports."

Prior to this statement, Anton Siluanov, Russia's Finance Minister, who also attended the IEF, warned, "We are considering reducing the assets composed of U.S. dollars in the National Wealth Fund (NWF) within a month," adding, "We may completely eliminate dollar assets from the NWF in the future." Dollar assets are estimated to account for about 35% of the NWF's total assets, approximately $41.5 billion (about 46.25 trillion KRW). The Russian government is open to converting these into alternative assets such as euros, gold, or yuan.

This statement is interpreted as a psychological battle ahead of the summit between U.S. President Joe Biden and Russian President Vladimir Putin scheduled for the 16th. The day before, the U.S. government suggested retaliation against Russia, accusing the Russian government of being behind a cyberattack on the U.S. subsidiary of the global meat company JBS, which is seen as prompting this countermeasure. The Russian government had previously stated in March that if U.S. sanctions persist, it would reduce the proportion of dollar assets not only in the NWF but also in its foreign exchange reserves.

Some predict that if China's digital yuan officially launches next year, the de-dollarization between China and Russia will deepen further. According to CNBC, the reduction of dollar assets by China and Russia has been ongoing since last year, and IMF data shows that by the end of last year, China's holdings of U.S. Treasury securities were about $1.07 trillion, a decrease of more than 20% compared to 2014.

This content was produced with the assistance of AI translation services.