Russia's foreign exchange reserve is a strategic reserve in the form of precious metals, diamonds, major convertible foreign currencies, reserve positions, special drawing rights, and other highly liquid assets. It can be used by state structures of monetary regulation to maintain the ruble exchange rate, finance the balance of payments deficit, and support the domestic economy. It consists of the reserves of the Government (Ministry of Finance) and the Central Bank.
Market laws do not imply a stable, predictable, planned course. On the contrary, peaks, recessions, cyclical development are natural for the modern world economy. In order to smooth out the consequences of a sharp fall, fuel the financial system, stimulate production, many countries accumulate part of their funds in national gold and foreign exchange reserves. Their global supply is equivalent to 12 trillion dollars.
Country Size
Russia's foreign exchange reserves in 2014 (as of August 1) amounted to $ 468.4 billion. This is the sixth indicator among all countries. Such a significant amount allows you to relatively relieve economic downturns, invest in long-term promising projects, and use funds in emergency situations. It should be noted that the stock at this historical stage is decreasing (by 4 billion over the last week of July).
- The largest accumulation of the world "locomotive" - the People’s Republic of China. The country is increasing its strategic reserve. In 2013, it increased by 3.09%, reaching $ 3.8 trillion.
- Japan has three times less reserves: in February 2014 they amounted to 1.288 trillion dollars.
- At the beginning of 2014, the European Central Bank had a reserve of $ 771.789 billion.
- More than Russia's gold and foreign exchange reserves, reserves in Saudi Arabia and Switzerland.
- The US reserve in February 2014 amounted to $ 146.057 billion (18th place).
Structure
The principle of forming a “gold and foreign exchange basket” implies the availability of the most liquid currencies, monetary gold and other precious metals, and international financial assets in the reserve. Exchange rates are interconnected, therefore, if one currency in a pair becomes cheaper, the second - in proportion to price. As a result, the reserve fund does not lose anything. The structure of gold and foreign exchange reserves of Russia is constantly changing, following the trends in the global economy. Previously, the base of reserves was precious metals and the US dollar. With the introduction of the common European currency, the euro has significantly squeezed the dollar.
Too high dependence on the US dollar is forcing countries to diversify their reserves. Russia invites interested states to accept (create) an alternative global currency. At the same time, the share of currencies of other leading countries is expanding in the basket. For example, the reserve was significantly replenished with the Canadian dollar, the British pound, the Japanese yen.
- The share of foreign currency is about 85%. For example, in the 1st quarter of 2013, 44.7% was the US dollar, the euro - 40.3%, the pound sterling - 9.9%, the Canadian dollar - 2.3%, the yen - 1%.
- Monetary gold - 8.9%.
- Special borrowing facilities - 2%.
- IMF reserve positions - 1%.
Gold reserves
Russia's foreign exchange reserve is based not only on currency. Diamonds and precious metals are also included in the reserve structure. These are bars of gold, palladium, silver, platinum. Gold is the most popular investment in the long run. Although its market value is subject to great fluctuations, during the crisis, the “yellow metal” becomes the most reliable means of payment.
Countries differently assess the feasibility of accumulating funds in gold bullion. On the one hand, they are indispensable in the face of a serious economic crisis and a possible war. On the other hand, they are lying in storage with a dead weight, instead of working for the economy. For example, in the United States more than 70% of the reserve is gold, while in China it is 1.1%. Russia is the leader in gold reserves in the CIS - 1,040.7 tons. However, it is 8 times less than stored in the United States.
Gold Reserves, 2014
The country | Percentage of the country's total foreign exchange reserve | Gold, tons |
USA | 71.7% | 8133.5 |
Germany | 67.8% | 3386.4 |
Italy | 66.7% | 2451.8 |
France | 65.6% | 2435.4 |
China | 1.1% | 1054.1 |
Russia | 8.9% | 1040.7 |
Dynamics
The Russian economy is mostly built around the extraction and sale of raw materials. The government has taken a principled position - it wants to get away from the model of a commodity economy and develop high-tech production. This will take years and multibillion investments. So far, Russia's gold and foreign exchange reserve is based on the sale of minerals and their derivatives. A significant share in exports is hydrocarbons (oil, gas), oil products and metals.
If we analyze the gold and foreign exchange reserves of Russia, the dynamics can be traced clearly. It strongly depends on the situation on raw materials in the world, especially in Europe, the main consumer of Russian gas and oil. For example, in 1999, the historical minimum of the reserve fund was fixed - $ 10.7 billion. In the same year, oil prices were minimal over the past 25 years, fluctuating around $ 10 per barrel.
Historical high
By 2007, there was a sharp demand for oil. In July 2008, the record value of the “OPEC basket” was recorded (the arithmetic average of the price of a barrel of different types of oil) was $ 140.73. The cost of gas is tied to oil prices, respectively, and it has skyrocketed. The government was not ready to absorb the flood of currency. It was decided to accumulate a part of the excess profits into the gold and foreign exchange reserve. In August 2008, Russia's gold and currency reserves reached a historic high of $ 598.1 billion.
Today
The current foreign policy situation and lower prices for natural resources are forcing the government to use part of the reserves to maintain the economy, strengthen the army, and ensure food security. If the gold and currency reserves of Russia on March 03, 2007 amounted to $ 494.6 billion, then by August they fell to $ 468.4 billion. Obviously, no reserves are expected in the near future. However, the net size of foreign exchange reserves is not an indicator of economic efficiency. If funds are spent on modernization, scientific research, invested in investments, then the money spent today will return tomorrow in the form of new technologies, modern production, improving the standard of living, improving the country's security.