CBR not planning additional diversification of reserves, as yuan component allows for financial stability - Nabiullina

MOSCOW. Sept 15 (Interfax) - The Bank of Russia does not plan to further diversify its international foreign exchange reserves, which now largely consist of assets in Chinese yuan, Central Bank Chairman Elvira Nabiullina said on Friday at a press conference.

"If you invest reserves in non-reserve currencies, they will cease to be reserves; these are non-reserve currencies, even if they are the currencies of friendly countries. We do not have a plan for diversification," she said.

In connection with the depreciation of the yuan against the US dollar, she recalled that earlier, when the basket of gold and foreign exchange reserves was more diverse, there were constant fluctuations in the prices of some of the foreign exchange assets it contained.

"It is very important for us that the presence of yuan in the reserves allows us to ensure financial stability if necessary, and if any foreign exchange interventions are needed in the foreign exchange market," Nabiullina said.

The Russian economy and trade settlements have already largely switched over to yuan. "Previously, when a significant part of the foreign exchange component of the economy was in dollars and euros, there was no demand for yuan; now there is a demand for yuan. With yuan, we can solve all the problems that gold and foreign exchange reserves face. Therefore, there are no plans for diversification," she said.

The Bank of Russia, after sanctions imposed on it in 2022 by Western countries, has limited management of a significant part of its gold and foreign exchange reserves. Part of the reserves, consisting of gold and assets in Chinese yuan, was not subject to restrictions. The main factor in the dynamics of the reserves is changes in the value of reserve assets due to revaluation against the US dollar.