Austin wrote:The CBR does not appear to be working in favour of Russia but the Global Central Bank and that is Bull Shift argument that CBR is independent , All Central Bank work in co-ordination with their Government , The Fed does that , Indias RBI does that and so does EU Draggi.
Russia cannot afford to be passive , How Russia would react to US confiscating its Forex is secondary but primary it should work to secure its asset , It has to be proactive.
I am not saying dump the USD/Euro entirely but just reduce its % from 45/40 % to like 15/15 % that would give US/Euro less leverage over Russia . Cut deal with chinese to keep forex in Renminbi and sell it in same in return for Long Term Investement in Russian Economy , Russia does not need security gurantees from Chinese like Gulf countries need from US but Chinese Economic Investment is what it needs.
The West are going to screw up Russia as long as it plays by its Rule Book . Gold is the Most Prefect Asset outside the power of any Central Bank in world buy it as much as one can , Russia should have Gold Reserves of atleast 5000 Tons , The Germans have around 4000 and US 8000 i.e if they even exisit in US vaults.
Rouble will be at a qualatatively different level if the Forex has 50 % gold reserves but the CBR has to do it. CBR right now is more than happy controlling inflation by High Interest Rates choking the economy of cheap money and thinks it has done a great thing controlling inflation ! Duh
I understand your point but you also need to understand that USD is still the main trading currency of the world, and the least volatile. It is still used as trade between Russia and various states because the other states may not want Rubles, Yuan or Euros. Even China and India has a large USD reserve. Funny you mention the other central banks but actually, CBR does actually work in tandem with Russian government and a huge part of the happenings within it are agreed upon by Putin and Co. Putin isn't dumb and understands they need USD as part of the Forex and used for trade and development. They keep it high for now specifically for business but as one may have noticed, they dropped over the years the amount of USD per the total Forex. It is due to increasing amount of businesses dealings between other states in their own respective currencies, as well as buying of Gold. The other part of the FOREX is that of us debt. So that also accounts.
So far, US in all intent and purpose, has not blocked Russia's USD in its Forex. If they did do that, then you would see massive shifts going on and not just Russian FOREX but other nations as well. Even if US does block it, the amount in Forex Russia has in other assets is still enough to not damage the nations banking system. And the Russians, as you pointed out, is increasing their reserves in other currencies such as Yuan.