Russia limited sanctions damage by ditching dollar – central bank

Bank of Russia Governor Elvira Nabiullina says Russia holds enough yuan and gold in its reserves to limit the impact of Western sanctions – even after Washington and its allies froze half the country’s holdings in dollars and other currencies.

The regulator cut the share of dollars in reserves to 10.9% as of January 1 from 21.2% a year earlier. Meanwhile, euro holdings reportedly rose to 33.9% from 29.2%. At the same time, yuan holdings grew to 17.1% from 12.8% a year earlier, while the share of gold held steady at 21.5%.

Ukraine-related sanctions imposed on Russia by the US and its allies include the freezing of up to half of the nation’s $642 billion in foreign currency reserves.

“This extraordinary, shock situation will lead to large-scale changes,” Nabiullina said in her annual report to parliament on Monday.

“The difficult process of adapting to the new conditions will inevitably lead to a contraction in GDP but the Russian economy will be able to return to a growth trajectory.”

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