Nabiullina Is Selling Off Gold

The Central Bank of the Russian Federation sold 44 metric tons of gold from its reserves to fund Putin's military budget.

The Bank of Russia, headed by Elvira Nabiullina, has been selling gold from its reserves for the sixth consecutive month in order to cover the federal budget deficit, which has reached nearly 6 trillion rubles in half a year, writes The Moscow Times.

In June, the Central Bank’s gold reserves, the fifth-largest in the world, shrank by another 0.3 million troy ounces, or 9.33 metric tons, and have declined by 1.4 million ounces, or 43.5 metric tons, since the start of the year, according to data from the regulator.

The sell-off was the largest in at least the last quarter-century—the entire period covered by statistics from the World Gold Council. According to its data, the Central Bank has conducted a sale of precious metals on a similar scale only once before—in 2002. At that time, over a six-month period (from January to June), Russia’s gold reserves decreased by 36.1 metric tons.

Even during the pandemic, when the authorities sold assets from their international reserves to support the ruble and the budget, the Central Bank sold six times less gold—7.6 metric tons between July 2020 and April 2021. As of July 1, 2026, the Central Bank’s gold reserves had fallen to 2,283 metric tons (73.4 million ounces)—the lowest level since February 2020.

The Central Bank may have raised about $5.6 billion from the sale of gold. And this money went toward balancing the budget, Vladimir Chernov, an analyst at Freedom Global , told Reuters: Since last fall, the regulator has been conducting transactions involving the precious metal on the domestic market, mirroring similar transactions by the Ministry of Finance using funds from the National Wealth Fund (NWF).

“When oil and gas revenues fall below the level stipulated by the budget rule, or when the fund’s resources are directed toward domestic investments, the Bank of Russia conducts offsetting transactions using liquid reserve assets. In this case, the Central Bank handles the technical aspects of the mechanism rather than making a separate decision to cover the budget deficit by selling gold,” Chernov explained.

Gold is suitable for such operations because it is stored in Russia, remains accessible to the regulator, and has risen significantly in value in recent years, he emphasized: “At the same time, the ability to use many foreign currency assets is limited after they were frozen abroad.”

The Central Bank began selling gold because it does not want to “burn through” all of its remaining yuan reserves, as economists Alexandra Prokopenko and Alexander Kolyandr previously wrote. The yuan is the last currency available to the Central Bank for market operations and influencing the ruble exchange rate, and it is not known for certain how much of it remains in the foreign exchange reserves: The Central Bank classified statistics on the structure of its reserves after it came under sanctions, and $300 billion of its assets in the West were frozen. According to the latest available data, the Central Bank held about $100 billion in Chinese yuan, but that amount may have decreased since then.

According to Chernov, most of the gold was likely sold to Russian banks through exchange-traded and over-the-counter markets. Data from the Moscow Exchange confirms this: the volume of gold transactions on the exchange has risen sharply this year. In March alone, it reached 42.6 metric tons, of which 14 metric tons were physical delivery transactions.

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