Russia preparing lawsuits against 'unprecedented' freezing of its int'l reserves - Nabiullina
MOSCOW. April 19 (Interfax) - Russia considers the freezing of its international reserves to be unprecedented, and intends to challenge the decisions in court, Central Bank Governor Elvira Nabiullina said during a discussion of the annual report of the Central Bank with the Communist Party of the State Duma.
"Of course, this is an unprecedented 'freeze' of the gold and forex reserves, so we will be preparing all lawsuits, and we are preparing to file them, as this is unprecedented on a global scale, for the gold and forex reserves of such a large country to have been frozen," Nabiullina said.
Nabiullina said on Monday that the Central Bank currently had around half of its gold and forex reserves at its disposal. This is gold, yuan, and they do not give us the opportunity to manage the situation with the currency in the domestic market," she said. Finance Minister Anton Siluanov has said sanctions had deprived Russia of assess to $300 billion of its reserves.
Russia's international reserves were $609.4 billion on April 8. They included $481.4 billion in foreign currency and $131.5 billion gold. Gold accounted for 21.5% of the reserves at the end of 2021. Foreign currency reserves were invested in financial instruments more than anything else at 33.9% denominated in euros, roughly $208 billion in terms of dollars, and the share of assets in Chinese yuan was 17.1% at $105 billion, U.S. dollars was 10.9% at $67 billion, British pounds was 6.2% at $38 billion, Japanese yen was 5.9% at $36 billion, Canadian dollars was 3.2% at $20 billion, Australian dollars was 1% at $6 billion, and Singapore dollars was 0.3% at $2 billion.
The reserves also include IMF special drawing rights and the reserve position at the IMF.
"Regarding the IMF I do not yet see such risks of them being seized. We do indeed have part of our gold reserves in the form of special drawing rights, or SDR, they are fairly illiquid, it is difficult to turn them into another form of foreign exchange reserves. The SDR are mostly there at the IMF, they were allocated to us according to quotas. We have been building [the reserves] up recently, switching to yuan and gold," Nabiullina said.
She said the Central Bank, when forming reserves, took the risk of a possible financial crisis and geopolitical risk into account. "We have continued to build them up and, I emphasize, to diversify our gold and foreign exchange reserves. The policy, the strategy for gold and foreign exchange reserves has been to ensure that the country could respond to any external crisis, whatever its nature: financial or geopolitical. So our gold and foreign exchange reserves were essentially divided into two parts," Nabiullina said. The first part of the reserves, in dollars, euros and pounds, was supposed to protect the domestic market from financial crises, and the second, in gold and yuan, in the event of a geopolitical crisis, she said.
Nabiullina said the Bank of Russia was the biggest holder of yuan among the world's central banks.
"But our reserves have not been seized, they have been 'frozen', we cannot make use of them, but they have not been taken away, expropriated or seized, but 'frozen' and we will of course be challenging this in all instances," she said.