The Central Bank of Russia announced retaliatory steps in response to sanctions imposed by Western nations that froze a substantial portion of the country’s gold and foreign currency reserves. The regulator’s statement explained the measures aimed at limiting the flow of money and safeguarding economic stability in the face of global pressure.
Among the actions cited were restrictions on capital movements, a ban on foreign investors selling securities, and prohibitions on withdrawing funds from Russia’s financial system. The government commission was granted authority to approve all settlements on corporate debts of domestic firms and public obligations owed to owners in unfriendly states. The regulator emphasized that these measures would prevent unauthorized outflows and preserve financial control within the country. (Source: Central Bank of Russia public statement)
The bank noted that despite efforts to shield assets, the freezing of some of Russia’s gold and foreign exchange reserves in dollars and euros could not be fully prevented. It explained that non-cash assets are typically reflected in correspondent accounts at foreign banks and may be frozen under external pressure. The discussion underscored the vulnerability of global reserves to political actions and the importance of liquidity management during times of tension. (Source: Bank of Russia press briefing)
Western sanctions, enacted toward the end of February following the military operation in Ukraine, severely constrained Russia’s access to a large portion of its reserves. Finance Minister Anton Siluanov reported that roughly $300 billion of the total $640 billion in reserves were affected, illustrating the scale of the financial constraint faced by the country. (Source: Russian Finance Ministry briefing)
In response, the Central Bank introduced additional controls: banks were barred from transferring funds from abroad to residents of sanctioned nations, a move that impacted 43 states including all European Union members, the United States, Canada, and several others. Russian stockbrokers were prohibited from executing sales on behalf of foreign clients. These steps were designed to deter capital flight and maintain market integrity amid external shocks. (Source: Bank of Russia official communications)
A further restriction limited non-residents from third countries to transfers not exceeding $5,000 per month via money-transfer services. The aim was to reduce the risk of significant money leakage from the Russian market during a period of reduced international liquidity. The bank also reassured the public that the nation’s gold and foreign currency holdings remained secure within Russian vaults. (Source: Bank of Russia Telegram channel)
According to officials, gold and foreign currency reserves serve as a tool to shield the economy from external crises, fund crucial imports, settle foreign currency debt, and stabilize the exchange rate. This perspective highlights how reserve composition can influence a country’s ability to respond to sanctions and global financial disruptions. (Source: Bank of Russia policy briefings)
At the outset of February, estimates placed Russia’s gold holdings at about $132.2 billion, with a portion of this bullion stored domestically. The bank noted that roughly $30 billion of the overall reserves were held in International Monetary Fund protections and Special Drawing Rights, a share that would not be subject to sanctions. (Source: Bank of Russia reserve data)
The broader reserve picture included significant positions in securities and cash held abroad. It was reported that approximately $311.3 billion was invested in foreign securities and about $152 billion existed as cash in foreign banks. Data from the bank, dated June 30, 2021 and released in January 2022 with a six-month lag, indicated currency distributions: the U.S. dollar accounted for around 16.4 percent of reserves, the euro about 32.3 percent, sterling near 6.5 percent, and the yuan approximately 13.1 percent. It was also noted that a notable share, roughly 14 percent, was located in Asia, with around 40 percent of all assets under the governance of the EU, the United States, Canada, and the United Kingdom. (Source: Central Bank of Russia statistical disclosures)