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Earlier this month, Russia reportedly continued the sell-off of its US bond holdings even as the Russian Central Bank’s foreign exchange and gold reserves grew in value to the equivalent of half a trillion dollars.

The share of yuan-denominated assets among Russia’s gold and foreign exchange reserves has climbed to about 15 per cent since 2018, Russian Minister of Finance Anton Siluanov has said.

The reserve hoard is now at 20 percent gold and 15 percent yuan. And between 2 and 10 percent dollar. Russia holds nearly one half of world’s reserve RMB.

“Over the past year, we have increased the share of holdings in Chinese assets, to where approximately 15 percent [of total] gold and foreign currency reserves are held in RMB,” the minister said, speaking to Russian media.

“This has not happened before,” Siluanov added.

A decline of dollar-denominated assets and the rise of gold and other foreign currencies in Russia’s reserves has been observed since 2017. Over the past two years, Russia has shaved its US bond, currency and other dollar-denominated holdings from over $92 billion to just $12.136 billion as of April 2019. [Albeit $38 billion of that may have been Russia merely offshoring US bonds to Caymans.]

At the same time, earlier this month, the Russian Central Bank announced that the country’s foreign exchange and gold reserves had climbed to approximately the equivalent of $502.7 billion as of 7 June, growing by about 1.5 per cent since 1 June.

Along with the yuan, Russia has boosted the purchase of a basket of other currencies, including Japanese yen, euros, British pounds, Canadian and Australian dollars, and Swiss francs. According to Bank data, yuan holdings proved a lucrative investment between June 2017 and June 2018, providing the highest yield among the portfolio of currency assets during the period.

In addition to currency, the Central Bank has been building up its gold reserves, with net buying of gold in the first quarter of 2019 reported at 55.3 tonnes, and Russia’s total reserves growing to 2,168.3 tonnes of the precious metal.

Central Bank chief Elvira Nabiullina has previously explained that the diversification of Russia’s assets was taking place in a bid to reduce economic and political risks it faces, including (but not limited to) US sanctions.

On Friday, Russian media reported that Siluanov and Chinese People’s Bank Governor Yi Gang had signed an intergovernmental agreement earlier this month to boost cross-currency settlements in trade to up to half of its total value in the coming years.

China is already Russia’s largest trade partner, with trade turnover growing by close to 30 percent in 2018 and reaching the equivalent of $107.06 billion. During that year, Chinese imports of Russian goods reached the equivalent of $59.08 billion, while Russian imports from China hit $47.98 billion. Earlier this month, Russia’s minister of economic development said the countries now have the “ambitious” goal of close to doubling trade to the equivalent of $200 billion in the coming years.