Russia falls off US list of major holders of treasuries
Russia is no longer listed among the major foreign holders of U.S. government securities, according to a report released by the US Treasury Department
Once among the top 10 foreign owners of Treasuries, Russia’s holdings of U.S. bills, notes and bonds in May fell to $14.9 billion, below the $30 billion threshold for inclusion on the Treasury Department’s monthly report of major holders.
The list Treasury released yesterday included 33 specific countries - from the biggest holder China to the smallest Chile - but Russia was no longer listed among them. In April, Russia’s holdings of Treasuries plunged to $48.7 billion from $96.1 billion, according to government data compiled by Bloomberg. This put Russia on the 22nd place of the list of main US Treasury bondholders.
The professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, speaking with Vestnik Kavkaza, noted that the Russian Central Bank is trying to manage geopolitical risks by doing this. "This year's events showed that it is likely that new anti-Russian sanctions will be introduced, and one of the options is freezing Russia's assets in US government bonds. It is not certain that it will happen, but the risk still exists, that is why it is becoming feasible for the Finance Ministry and the Central Bank to withdraw reserves from the US treasury securities to any other assets," he said.
According to the economist, most likely this money will be invested in gold assets. "So far, they do not disclose their investment portfolio - probably it will be gold, perhaps the currencies of European countries. There is also the possibility of nominal holding of US Treasury bonds, when securities are transferred through an intermediary and Russia does not directly own US bonds, only through Deutsche Bank or any other banks," Alexander Abramov stressed.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, said that the US Treasury statistics does not mean any massive withdrawal of Russian state funds from US assets. "This statistics only shows that the Russian Central Bank has actually reduced the number of its securities in the US accounting system - but it does not mean that it withdrew money from the US. It is possible that the Central Bank is transferring these securities to another depository," he pointed out.
"The Central Bank's statistics as of June 1 indicates a decrease in securities by about $40 billion, with simultaneous increase in funds placed on deposits with commercial and central banks, the volume of reserves as a whole also increased. Therefore, while there are no official statements from Russia's Central Bank on a real reduction in its investments in US bonds, it's too early to say that Russia is withdrawing funds from the United States," Konstantin Korishchenko concluded.