Russia weighs addition of Australian, Canadian dollars to its forex reserves: report

For the first time Russia is likely to add the Australian and Canadian dollars to its international foreign exchange reserves on the back of good performance of the currencies in the past 12 months, media reports said.

The Central Bank of the Russian Federation's deputy chairman Alexei Ulyukayev told Bloomberg on Tuesday that adding the Australian dollar was being discussed and that it had not begun operations with the Canadian dollar after adding it to its portfolio.

Russia has the world's third largest international foreign exchange reserves of $458.2 billlion as of June 4. U.S. dollars account for 47 percent of its reserves, while euros make up 41 percent. British pounds account for 10 percent and Japanese yen 2 percent, Ulyukyaev had said in November.

The central bank has reduced Russia's exposure to dollars in terms of reserves from 50 percent in 2006, when euros accounted for 40 percent and the remaining 10 percent was in yen and pounds, the report said.

Last year, Russian President Dmitry Medvedev had suggested Russia would cut its use of the U.S. dollar as a reserve currency after it lost 34 percent of its value against the euro in two-and-a-half year period. The euro fell to a four-year low of $1.1877 on June 7 and has dropped 22 percent since November 25 on concerns over failing efforts to contain European debt crisis.

The currencies of Canada and Australia have performed well due to investor speculation that a recovering global economy will increase demand for these countries’ raw materials.

The Canadian dollar has gained 10 percent against the U.S. currency and 23 percent versus the euro during the last 12 months, while the Australian dollar is up 8.6 percent against the US greenback and 21 percent against the euro.

President Medvedev has pushed for the creation of regional reserve currencies and had even produced a prototype coin for a “world currency” last year with a view to stabilizing the global economy, the report said.

The rouble gained almost 11 percent against the euro and 0.2 percent versus the dollar in the past 12 months.

In May, Russia had a net capital inflow of about $3 billion, down from an inflow of between $3 billion and $4 billion in April and the Russian government forecasts no net capital inflow this year after it reported outflows of $52.4 billion in 2009.

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