Pandemic regrouped reserves // Monitoring of public finances

The Bank of Russia has published the results of the traditional annual comparison of international reserves of 70 countries for 2020. It is based on a sample corresponding to the list of countries reporting in accordance with the IMF’s specific data dissemination standard (additionally includes Taiwan).

The absolute volume of international reserves of most countries (55 out of 70) increased in 2020. The list of developed countries included Lithuania, Australia, New Zealand, Iceland. A set of epidemiological, economic and political shocks led to a decrease in the reserves of Armenia and Belarus. Turkey and Saudi Arabia were losing reserves primarily for economic reasons, like most South American countries (Argentina, Brazil, Costa Rica, El Salvador, Chile), as well as Egypt and South Africa. Against this background, in most countries (56) the share of gold in reserves grew or remained unchanged, although most often (in 29 cases) the volume of gold in tons decreased or remained unchanged. Note that the share of monetary gold in the Central Bank’s reserves in August 2021 decreased to 21.5% from 22.4% in July, the Bank of Russia for the first time since March 2020 replenished its reserves with gold.

The qualitative parameters of reserves have also changed – the ratio of their volume to GDP and sufficiency (the minimum sufficient is the value of assets corresponding to the cost of imports of goods and services for a quarter; see the graph). Thus, the first three places in terms of the share of reserves in GDP at the end of 2020 were taken by Switzerland, Hong Kong and Singapore. At the same time, Hong Kong lost its leadership in 2019 at the end of the year, while Switzerland and Singapore improved their positions. Russia’s place in terms of reserves to GDP remained unchanged – 11th. At the end of this list of countries are Slovenia, Ireland and Luxembourg.

At the same time, in terms of the adequacy of reserves, Russia remains in third place out of 70 countries from the list presented. This indicator was 24 months at the beginning of 2021 against 19 months at the beginning of 2020. The unchanged leaders in this parameter have changed places over the year. Switzerland took the first place (32 months against 27 months a year ago), formally displacing Saudi Arabia in second place (also 32 against 29).

Alexey Shapovalov

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