Russia strips dollars from sovereign wealth fund

Significance

Russia's sovereign welfare fund will eliminate all its dollar holdings this month. The announcement was timed less than two weeks before Putin's June 16 summit with US President Joe Biden.

Impacts

• The summit outcome will influence investors' geopolitical risk perceptions and affect their valuation of Russian financial assets.
• Broader de-dollarisation is unlikely as Russians still view the US currency as a safe asset.
• The rising share of the euro and renminbi reflects the importance of Russia's two leading trading partners.