(Markets Insider) The Governor of Russian central bank Elvira Nabiullina has admitted that the country faces challenges getting foreign currency options due to the freeze of its global reserves.
The central bank says it has been left mostly with China’s yuan and gold following the sanctions, with about half of its $642 billion in reserves already frozen.
Nabiullina says that the country should look toward the future, warning that the countries issuing liquid reserve currencies are few and have already taken hostile measures to limit access.
The central bank chief said that it would take around 2% to take inflation to around the 4% targets. She says the impacts of the sanctions are spiraling over to the real economy.
Nabiullina warned that the period Russia can rely on reserves is limited. She says that the country will enter into a period of structural transformation in the second and third quarter.
Russia held around 11% of its reserves in the dollars before invading Ukraine but decreased it by adding the yuan and the euro. It has now about a third of its reserves in euros, which have all faced sanctions.
The currency freeze against Russia has since seen the central bank hike rates steeply and imposed capital controls. The country plans legal retaliations against the countries that have blocked its reserves.
USDRUB is down -0.75%
