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3 Sep, 2021 13:00

IMF transfer pushes Russia's international reserves to historic high

IMF transfer pushes Russia's international reserves to historic high

Russia's international reserves, the world’s fourth-largest, jumped by $20 billion, or 3.4%, in a week following a transfer from the International Monetary Fund (IMF).

The country’s reserves reached $615.6 billion as of August 27, the Russian central bank said, hitting a new historical maximum. As of August 20, Russia's international reserves were $595.6 billion.

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The growth is mainly attributed to the billions of dollars that the country received from the IMF. In late August, the IMF gave Russia around $17.5 billion in its Special Drawing Rights as part of the global $650 billion SDR allocation that aims to support the world’s economic recovery from the Covid-19 pandemic. The ongoing allocation is the largest distribution of monetary reserves by the IMF on record. Russia got 2.71% of the amount.

According to the IMF, countries can use the SDRs to support their economies or grant them to other countries, but cannot use the fiscal space to delay economic reforms or for debt restructuring. SDRs can be exchanged for any freely convertible currency.

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Experts earlier noted that Russia could transfer its IMF tranche in favor of poorer states or to support Belarus. However, the Central Bank of Russia announced that it would add the IMF funds to its reserves.

The previous maximum of Russia’s international reserves was recorded in the spring, when they rose to $605.9 billion over the week from May 22 to May 28.

Russia’s international reserves are highly liquid foreign assets held by the country’s central bank and the government. They consist of foreign currency funds, SDRs, reserve position in the IMF and monetary gold. The central bank's target level for Russia’s international reserves is $500 billion.

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