nternational • 08:11 • Modified at 13:27 Russian cash reserves 'melting away' but Moscow could continue to wage war Author : Mark van Harreveld Russia is seeing its gold reserves melt away, Oleg Ivashchenko, the head of Ukraine's foreign security service, told Ukrinform news agency in an interview. "Before the invasion in 2022, the Russian National Wealth Fund contained about $150 billion, now there is only about $38 billion left. The money is melting away." Russia's gold reserves are also dwindling rapidly, Ivashchenko said.
The Ukrainian foreign intelligence service predicts that Russia will face serious economic problems by the end of this year, including in the areas of finance and labor. A crisis is also looming in the energy sector and in public utilities. The shortage of personnel in particular will play tricks on Russia, according to the intelligence chief.
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"Russia had 2,300 tons of gold," Ivashchenko said, "now it has dropped to 1,700 tons. They are selling it. There was 164 billion RMB (Chinese renminbi, ed.), these reserves are also gradually decreasing. In total, Russia overspent $5 billion on military resources in the last three months. For their economy, this is very serious."
High salaries Russia's shortage of personnel is felt in almost all sectors, except the army, where salaries are good. Defense is thus drawing people away from the civilian economy. 'Anyone who wants to earn money in the Russian Federation joins the army. If you sign a contract, you get $30,000 to $40,000, depending on the region. Recruits are paid by the state, local governments and companies. People are encouraged to enlist,' Ivashchenko said.
According to the intelligence chief, Russia is recruiting 1,000 to 1,200 new soldiers every day, and Russia wants to build 13 new divisions "to restore the old Soviet Union. "This is not a mobilization for peace, but a preparation for something bigger." But the ongoing recruitment also serves an economic purpose, Ivashchenko believes. "It's the economy. Right now, the only industry that is growing is the military-industrial complex. If it stops, the entire Russian economy will collapse."
Prosperity Fund The National Wealth Fund, while severely depleted, still contains enough liquidity to continue financing Russia’s war, according to The Bell, an independent Russian business news platform. The liquid portion of the fund is currently at its lowest level since 2019, having halved over three years of war. However, The Bell is not calling it a crisis, based solely on the amount of money in the fund. Yes, the Russian economy is at great risk, but no, there is no crisis.
Injection According to analysts at The Bell, there are two main reasons for this. First, the liquid part of the fund should increase by 50 percent after the injection of $16 billion when Russia cashes in its oil and gas revenues this summer. Second, The Bell gives the reason that the fund, although there are some exceptions, is not used for government spending. The main role of the fund is to balance the impact of government fiscal policy and to provide a financial buffer in an unexpected crisis (such as a prolonged fall in oil prices or a sudden, unavoidable increase in spending).
