The Russian central bank said on Wednesday that its sales and purchases of gold in the domestic market for the budget reserve, the National Wealth Fund (NWF), have been increasing in recent years due to the enhanced liquidity of gold.

The central bank’s assets in US dollars, euros, and other major Western currencies have been frozen as part of Western sanctions imposed on Russia.

In 2023, Russia excluded the US dollar, euro, and other Western currencies from the currency structure of its fiscal reserves, which are now held in China’s yuan and gold, with target shares of 60% and 40%, respectively.

“Yuan and gold are liquid assets of the NWF. The purchase or sale of liquid currency assets of the NWF for roubles entails the central bank conducting equivalent volume operations in the domestic market,” the central bank stated.

Due to the rally in global gold prices, the turnover of gold in the domestic market has grown, enabling the central bank to intensify its transactions in gold. The bank did not specify when it had increased the transaction volume.

The central bank cannot buy gold in international markets due to sanctions. Although Russia ranks as the world’s second-largest gold producer after China, the low liquidity of the domestic market previously limited the central bank’s ability to increase operations.
“Since the liquidity of the domestic gold market has increased in recent years, the central bank conducts equivalent operations not only through the purchase and sale of yuan for roubles but also partially through the purchase and sale of gold,” the central bank said.

As of November 1, the liquid assets in the NWF, comprised of yuan and gold, amounted to $51.6 billion, or 1.9% of the projected gross domestic product (GDP). These assets could be used to cover the budget deficit.

The NWF retains roubles from the state budget’s excess oil revenues, while the central bank handles transactions in gold and foreign currency for the fund. It has been selling foreign exchange and gold on a net basis throughout 2025.

The foreign currency and gold held on behalf of the NWF are accounted for as part of the central bank’s gold and foreign exchange reserves, which stood at almost $720 billion, including the frozen assets, with the share of gold at over 41%.