Russia’s National Wealth Fund shrank by 383.3bn roubles in July, leaving the Kremlin with a dwindling pool of assets it can quickly deploy to support the budget.
The fund stood at 12.72tn roubles on 1 August, equivalent to 5.4% of gross domestic product, according to figures from Russia’s finance ministry reported by Interfax and circulated by Russian media on 11 August 2026. A month earlier, it was worth 13.104tn roubles, or 5.6% of GDP.
The figures expose the growing strain created by the economic policy of the finance ministry and Anton Siluanov, Russia’s finance minister. Although the fund’s liquid assets rose slightly in rouble terms, to 3.693tn roubles from 3.61tn, the increase was largely a result of the rouble weakening against the Chinese yuan. The available reserve remains only 1.6% of projected 2026 GDP.
Only a fraction of the fund is readily available
At the start of August, the liquid portion of the fund was valued at $46.242bn, compared with $46.45bn a month earlier. The difference illustrates the gap between a higher rouble figure on paper and the fund’s actual purchasing power in foreign currency.
Nearly 70% of the National Wealth Fund remains tied up in illiquid shares, deposits and infrastructure bonds issued by state-owned companies. Those holdings cannot be converted rapidly into cash if the government faces a sudden fiscal or financial crisis. The headline size of the fund therefore gives a misleading impression of the resources immediately available to the state.
The liquid reserve is also smaller than the federal budget shortfall recorded in the first half of 2026, which reached 5.7tn roubles. On its current trajectory, the fund cannot cover that gap without additional borrowing, spending cuts or the sale of assets that may be difficult to realise quickly.
War spending is accelerating pressure on the budget
The fall in the fund’s total value points to the gradual depletion of Russia’s principal financial reserve as government spending rises. The pressure is particularly strong from increased allocations to the defence-industrial complex and the financing of Russia’s war against Ukraine.
With sanctions restricting access to cheap foreign borrowing, the finance ministry has been turning more heavily to federal loan bonds issued on the domestic market. High interest rates mean that the state must borrow at increasingly expensive terms. A growing share of budget revenue is consequently being directed towards servicing public debt rather than supporting economic development.
That financing model may keep the state operating in the short term, but it reduces the room available for responding to further shocks. It also shifts more of the cost of the government’s fiscal policy into future interest payments, while the weakening rouble and inflation erode household incomes.
Gold and yuan leave reserves exposed to outside decisions
In July, 1.632bn roubles from the fund were converted into 158.9kg of gold held in unallocated form, while a further 529.7m roubles was converted into 47.1m Chinese yuan. The fund held 189.68bn yuan at the beginning of August, slightly below the 189.8bn recorded a month earlier. Its gold holdings rose to 141.242 tonnes from 141.1 tonnes.
The shift has left the fund structured around two main assets: Chinese currency and physical gold. A negative revaluation of gold has already reduced its rouble value by 73.1bn since the start of the year. The fund also has $3bn tied up in Ukrainian Eurobonds described as effectively irrecoverable.
Russia’s decision to abandon the dollar and euro has made the fund dependent on the yuan for its foreign-currency holdings. The yuan is not fully freely convertible, and its exchange rate is closely managed by the People’s Bank of China. Any decision by Beijing to devalue the currency in response to domestic economic pressures could reduce the international value of Russia’s reserves, leaving Moscow with no direct control over the outcome.
Income from the fund’s foreign-currency accounts at the Bank of Russia amounted to $62.2m between 15 December 2025 and 31 July 2026, equivalent to 4.966bn roubles. That return is modest beside the scale of the budget deficit and the losses caused by adverse asset valuations. The central question is how long Russia can sustain war-related spending while the portion of its reserves that can be mobilised quickly continues to narrow.
Does the National Wealth Fund’s reliance on gold and the yuan make Russia’s reserves more resilient, or more vulnerable to forces beyond Moscow’s control?
