Nearly half of Russia's gold and forex reserves frozen due to sanctions

Western countries have imposed unprecedented sanctions on Russia's corporate and financial system in response to its military offensive in Ukraine

Russian Finance Minister Anton Siluanov said sanctions had frozen about $300 billion out of $640bn that Russia had in its gold and forex reserves. Reuters

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Russia said on Sunday that it was counting on China to help it withstand the blow to its economy from western sanctions, which it said had frozen nearly half of its gold and foreign currency reserves.

“We have part of our gold and foreign exchange reserves in the Chinese currency, in yuan. And we see what pressure is being exerted by western countries on China in order to limit mutual trade with China. Of course, there is pressure to limit access to those reserves," Finance Minister Anton Siluanov said.

"But I think that our partnership with China will still allow us to maintain the co-operation that we have achieved, and not only maintain, but also increase it in an environment where western markets are closing."

Western countries have imposed unprecedented sanctions on Russia's corporate and financial system since it began a military offensive in Ukraine on February 24.

Mr Siluanov's comments in a TV interview marked the clearest statement yet from Moscow that it will seek help from China to cushion the impact.

The two countries have tightened co-operation in recent times.

Russian President Vladimir Putin and Chinese President Xi Jinping met in Beijing on February 4 and announced a strategic partnership they said was aimed at countering the influence of the US, describing it as a friendship with no limits.

Members of the Russian police force and Rosgvardia, the country’s domestic army, patrol Red Square, Moscow. AFP

A Renault car showroom in St Petersburg. Reuters

An Ikea store in Khimki, about 18 kilometres north-west of Moscow. Bloomberg

Traditional Russian dolls, also known as matryoshki, sit in the window of a Swatch Group wristwatch shop at the GUM department store in Moscow. Bloomberg

A Chanel concession occupies the middle of the lower floor of the GUM department store, on Red Square in the Russian capital. Bloomberg

Food manufactured by Nestle sits on display inside the Detsky Mir children’s goods store on Vozdvizhenka St, Moscow. Bloomberg

US chipmaker Intel Corp’s ‘smart building’ in Petah Tikva, near Tel Aviv, Israel. Intel announced on Tuesday that it was suspending operations in Russia. Reuters

A woman walks past a closed H&M store in Moscow. Reuters

An electronic billboard on RusHydro’s Institute Hydroproject building in Moscow displays a Samsung advert. Reuters

Customers queue to enter Uniqlo in Moscow. In early March, the Japanese fashion brand said it would stop selling clothes in Russia, having earlier defended its decision to keep its stores in the country open. Reuters

A Marks & Spencer store in the Afimall City mall at Moscow International Business Centre. Bloomberg

An Apple store at the Aviapark shopping centre in Khoroshyovsky, Moscow, in 2020. Bloomberg

A woman drinks coffee inside a Starbucks cafe in Khimki in 2007. Reuters

An employee fills the tank of a car at a BP petrol station in Moscow in 2016. Reuters

People eat at McDonald’s in central Moscow in 2016. Reuters

An advert for US soft drink giant Pepsi sits above a sign for a McDonald's restaurant in Moscow. AFP

Bottles of Coca-Cola are displayed at Colonial Liquors in Corte Madera, California. In early March, the soft drinks brand said it was withdrawing from the Russian market. AFP

The Netflix building on Sunset Boulevard in Los Angeles, California. The streaming site has suspended its services in Russia. AFP

TikTok’s UK office in London. The Chinese company has restricted uploads to its social media service in Russia to avoid falling foul of the country’s strict new online publishing rules. AFP

The sanctions on Russian reserves have become one of the most painful measures for the Russian economy.

A month ago, Mr Siluanov said Russia would be able to withstand sanctions thanks to abundant reserves and was even considering offering Eurobonds to foreign investors once the market volatility subsides.

On Sunday, he said the sanctions had frozen about $300 billion out of $640bn that Russia had in its gold and forex reserves.

Mr Siluanov also said Russia will fulfil its state debt obligations and pay roubles to its debt holders until the state reserves are unfrozen.