May 26, 2022

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50 billion usable reserves remain –

from Giuseppe Sarsina

The goal of turning the ruble into waste paper has so far failed, thanks to the strategy of Central Bank Governor Nabiullina: but reserves are running out, and could last for a few more months – provided that Russian gas revenues do not change. . And oil (on which the new European sanctions will focus).

from our reporter
Washington – Governor of the Central Bank of Russia, Elvira Nabiulina

deeply concerned about the impact of sanctions. It was one of the main actions taken by the West Freezing nearly two-thirds of the bank’s available reserves. This means foreign currency and gold with an equivalent value $643.2 billion.

The restriction was supposed to prevent Vladimir Putin’s government from supporting Quote from rublethus plunging the Russian economy into the inferno of stagflation: high prices are accompanied by a sharp stagnation.

Indeed, the ruble collapsed in the first stage on the markets, but in recent weeks it not only recovered, but also rebounded with values ​​better than those recorded on the eve of the attack. This is the sequence of the exchange of the ruble and the dollar: February 23, 83.82 (dollars); March 9, the collapse at a height of 138.73; Then it rose to $81.12 yesterday, April 18. The numbers are clear: the goal of reducing the Russian currency to paper waste has not been achievedat least for now.

For any reason? Sure, they weighed Countermeasures approved by the Governor of the Bank, Elvira Nabiulina. Or not Immediately raise the interest rate up to 20%, in order to make new government bonds denominated in rubles more attractive. Then it was imposed on the major export companies, in particular the three multinational oil companies, Gazprom, Rosneft and Lukoil, to Convert 80% of foreign currency receipts to local currency.

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but that is not all. Russia is still able to transfer part of its cash reserves. how many? We get the answer from the press releases issued by the same bank in favor of the financial markets. So we start from $643.2 billion on February 25, 2022 and reach $604.4 billion on March 25.

In one month, Nabiullina put 38.8 billion in foreign exchange reserves on the table.

In parallel, the Russian government has at its disposal Revenue, uninterrupted, from exporting gas and oil: Estimated at about $40 billion, or nearly a billion a day (again until March 25).

In total, Putin was able to manage one Huge liquidity close to 80 billion dollars To finance the war and mitigate the severest blow to sanctions.

now for, The governor’s words show that margins are running out quickly. And here helps us the old graph that the Central Bank of Russia removed from the web, but retrieved from the Statista website.

The cross section of the wallet is not by currency, but by countries in which accounts are kept. Data refer to June 30, 2021. On that day, reserves totaled $591 billion. Well, the value of gold is equal to 21.7% i.e. $128 billion stored entirely in Russia. Then here is the first surprise: 13.8% or 81.5 billion dollars in Chinese banks; 12.2% or 72.1 billion in France; 10%, 59.1 billion, in Japan; 9.5%, 56.1 billion, in Germany; 6.6%, 39 billion, in the US; 5.5%, 32.5 billion, in multilateral institutions, such as the IMF and Bank for International Settlements, and finally 4.5%, 26.5 billion, in the United Kingdom.

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All these numbers indicate some considerations. The US, EU, UK and Japan aim to close all central bank accounts abroad. However, Moscow could always count, to say the least, on the Chinese piggy bank. The equivalent of $81.5 billion was deposited there on June 30.

It is impossible, at this point, to accurately determine how much money is in there at the moment. We can only experience an estimate. It is reasonable to assume that the Russian Central Bank had the same ratio in portfolio diversification as well on February 25th. This brings the Chinese share to 88 billion (13.8% of 643.2 billion). Let’s also imagine that the Russians relied only on those accounts to prop up the ruble, spending 38.8 billion. This means that day It would still have the equivalent of about $50 billion to use on ready cash To face another monetary crisis such as the end of February crisis.

Moscow, therefore, He might be able to keep the ruble for a few more months. how many? It depends on how long the real economy will hold and If revenue from gas and oil is not reducedor. That’s why Nabiulina sounded the alarm.

Apr 19, 2022 (change on Apr 19, 2022 | 11:59 AM)