Russia’s central bank forced to sell gold reserves to cover budget, support ruble
For the first time in its history, the Central Bank of Russia (CBR) has begun selling from its reserves directly to the domestic market, enabling banks, state-owned companies, and investment firms to purchase sovereign gold, according to a report from Ukrainian news service UNN citing the country’s Foreign Intelligence Service.
“For the regulator, this is a forced step: gold is effectively becoming a tool to support the ruble, patch up corporate liquidity, and cover budget needs amid the rapid depletion of other resources,” the report said.
The move is unprecedented: Before 2025, the CBR never sold its gold to commercial market participants, only receiving it through the Ministry of Finance to increase its reserves. But with the country’s National Welfare Fund seeing its liquid assets decline from $113.5 billion in 2022 to $51.6 billion in 2025 – and the fund's gold holdings falling 57% from 405.7 tons to 173.1 tons – the central bank has no choice but to sell off its reserves.
The report estimates that the CBR could sell as much as 230 tons of gold valued at $30 billion this year, and at least another 115 tons worth $15 billion in 2026.
“The strategy of selling gold supposedly allows for prompt budget replenishment and ruble stability, but it creates long-term risks: it deepens the deficit of liquid reserves, makes state finances more dependent on asset sales, and limits opportunities for future interventions,” the report said. “The actual ‘eating away’ of reserves – including gold, which for decades was considered untouchable – underscores how narrowed Moscow's financial space has become under the pressure of sanctions.”
In a separate report, Russia's central bank stated that central banks in emerging markets were buying gold to diversify their international reserves in part because of plans by the G7 to confiscate billions of dollars of frozen Russian assets.
The CBR was quoted by Reuters as saying that investor interest in gold was rising due to uncertainty about global growth, but “at the same time, the precious metal is receiving additional support from steady demand from central banks in emerging market economies, which continue to diversify their international reserves amid discussions by the G7 on the use of frozen Russian assets.”
The report noted that of the approximately $300 billion in frozen Russian assets, $243 billion are held in Europe, while Russia's total gold and foreign exchange reserves stood at $734.1 billion as of Nov. 14.
