Support The Moscow Times!

Rich Russians Snap up U.S. Treasuries

As the Central Bank moves away from the dollar, Russians with cash are swooping in.

The Russian Central Bank has been reducing its holdings of dollars in its reserves. Igor Ivanko / Moskva News Agency

Russian President Vladimir Putin’s moves to ditch dollar assets in the face of deepening tensions with the U.S. don’t seem to be making much of an impression on the nation’s rich.

While the Russian central bank has cut its Treasury holdings to a 12-year low since 2018, Citigroup’s wealthy clients in Moscow have been shifting money into U.S. debt.

“Previously, there was no demand for American government bonds at all, but now we see people want to buy them in various forms,” said Mikhail Znamenskiy, head of the investment products and financial consulting department. “Rich clients clearly are moving away from risk.”

The portfolio of an average client with at least 60 million rubles ($930,000) now has 22% allocated to developed-market fixed income, up from about 10% a year ago, according to the bank’s local unit. The bank has well over 500 such clients in Russia, it said, without specifying exact numbers.

The shift shows that the Kremlin’s move to de-dollarize the Russian economy and lower its vulnerability to U.S. sanctions isn’t being mirrored in private accounts. By ignoring geopolitics, Citibank’s clients avoided a sell-off in risky assets this year and mopped up returns from a rally in treasuries.

Znamenskiy said there’s also appetite among Citibank’s wealthy clients for developed-market high-yield bonds with 3-5 year maturities, and for U.S. equities, including in the healthcare, robotics and artificial intelligence sectors.

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more