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Russia’s foreign currency reserves fall to lowest levels since 2008 amid mounting deficits

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Russia’s foreign currency reserves fall to lowest levels since 2008 amid mounting deficits
Russian President Vladimir Putin delivers a televised address to the nation at the Kremlin in Moscow on Nov. 21, 2024. Putin said that the country's forces hit Ukraine with a new intermediate-range ballistic missile. (Vyacheslav Prokofyev/POOL/AFP via Getty Images)

Russia’s foreign currency reserves, built over a decade from surplus revenues in the raw materials sector, are nearing exhaustion, The Moscow Times reported on Dec. 5.

Before Russia’s full-scale invasion, the National Welfare Fund (NWF) held approximately $140 billion in liquid assets. Over three years of war, this financial cushion has dwindled to nearly one-third of its former size.

As of Dec. 1, liquid assets in the NWF had fallen to $53.8 billion, according to the Russian Finance Ministry.

Since January, the NWF’s free assets, initially intended for pension financing but repurposed to fill budget deficits, have shrunk by $2.1 billion.

To address its budget shortfall, Russia has also begun selling off gold reserves from the NWF. Between June and early December, 50 tons of gold were sold, leaving 279 tons in reserve.

Russia’s 2025-2027 budget projects increasing deficits — $11 billion in 2025, $21 billion in 2026, and $28 billion in 2027. The total shortfall of $61 billion over three years surpasses the NWF’s remaining liquid reserves.

Compounding these fiscal strains, recent U.S. sanctions against 50 Russian banks in November have disrupted financial transactions with China.

Russian importers now rely on intermediaries to pay Chinese sellers, as direct payments have become nearly impossible under intensified U.S. scrutiny, The Moscow Times reported on Dec. 2.

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Tim Zadorozhnyy

News Editor

Tim Zadorozhnyy is a news editor at The Kyiv Independent. Based in Warsaw, he is pursuing studies in International Relations, focusing on European Studies. Tim began his career at a local television channel in Odesa. After moving to Warsaw, he joined the Belarusian opposition media outlet NEXTA, starting as a news anchor and later advancing to the position of managing editor.

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