Russia Yet to Identify Alternative Reserve Assets After International Financial Curbs, says Governor Nabiullina

Russian central bank is yet to find any clear alternatives to the world’s major reserves currencies after sanction over war in Ukraine left it with possession of only gold and yuan.

The central spend years reducing exposure to dollar before the invasion, holding just about 11% end of last year. More than a third of it reverses was in euro on top of additional currencies such s the British pound and the yuan.

According to Governor Elvira Nabiullina, the regulator is yet to find other reserve options. She added it was too early to draw lesson what Russian should do different while speaking in front of a parliamentary committee in Moscow.

“We need to look toward the future, but at the moment I am struggling to give specific suggestions,” she said. “The list of the countries issuing liquid reserve currencies is limited and they are the ones that have taken hostile measures and limited our access.”

The international financial curbs to Russia lead it to put strict capital control and to hike interest rate in an emergency move to calm markets. In recent week its reserve reached stabilized level after sharp decide earlier.

The yuan accounts from 17.1% of the  total at end-2021, up from 12.8% a year earlier, while gold’s share was down slightly at 21.5%, accordion to Bloomberg.

Asked if the central bank planned to retaliate against countries that blocked Russian assets, Nabiullina said it’s “certainly planning such legal actions.”

But “they must be very carefully thought through, justified, so that we get the desired result,” she said. “And we are preparing for this.”