How the currency structure of the National Welfare Fund has changed
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By counting According to Bloomberg and Citigroup analysts, if Urals oil costs $25–35 per barrel, the Central Bank’s reserves in yuan will be exhausted as early as 2023. If the price of the energy resource remains at the current level at the time of the study ($58.8 per barrel), the reserves in Chinese currency will be used up in two and a half years. According to the latest official data (at the end of January 2023), the reserves of the National Welfare Fund (NWF) in yuan amounted to 307.45 billion, equivalent to $45 billion.
Until the end of 2020, the structure of the NWF foreign exchange reserves consisted of the dollar, the euro (over 90% in total) and the British pound. In 2021, Asian currencies appeared in it – the Chinese yuan and the Japanese yen (as well as gold). At the same time, it was decided to abandon dollar assets. By the end of 2022, only two currencies remained in the NWF – the euro and the yuan. Account balances in pounds and yen were zeroed out, and “unfriendly” euros were significantly reduced. In the new fund structure, approved Ministry of Finance, the share of the yuan will be limited to 60%, non-cash gold – 40%.
It should be added that Russian oil is currently trading below the $60 price ceiling. In January 2023, a barrel of Urals oil averaged $49.48.
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