Russia Liquidates 71% of Wealth Fund Gold to Finance Budget Gap

In a drastic move, Russia has liquidated 71% of its National Wealth Fund (NWF) gold reserves to finance its war efforts and cover the growing budget deficit. 

As traditional revenue sources have faltered under international sanctions and a sharp drop in oil prices, gold has become a crucial asset for the Kremlin.

The depletion of the NWF's gold reserves, which dropped from 554.9 metric tons in May 2022 to just 160.2 tons by January 2025, is a sign of the country’s ongoing financial struggles.

This ongoing gold sell-off is part of a broader strategy to manage Russia's budget deficit, which ballooned in 2025 due to these economic pressures.

Key Takeaways

• Russia has sold off 71% of its gold reserves from the National Wealth Fund to manage a growing budget deficit.
• The country's financial crisis, worsened by sanctions and falling oil prices, has forced the Kremlin to deplete sovereign gold reserves.
• In 2026, Russia’s National Wealth Fund may face further depletion, with up to 60% of its remaining liquid reserves being used to finance the war and state projects.

The National Wealth Fund Depletion

The National Wealth Fund (NWF), once a cornerstone of Russia’s financial stability, has been drained over the past few years. 

Between May 2022 and January 2025, gold reserves were reduced by more than 70%, and Russia's reliance on gold liquidation has only intensified.

These reserves were once intended to provide a buffer against economic volatility, but they are now being used to fill the gap caused by plummeting oil revenues and new rounds of international sanctions.

With the Russian economy struggling under sanctions, the central government turned to its sovereign gold holdings as a stopgap measure. 

The NWF had already seen a decline in 2023, with 196 tons of gold being sold—about one-third of the reserves at the time.

The situation worsened in 2024, when a further 171 tons were sold off, pushing the NWF to a critical low.

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The Impact of Sanctions and Oil Price Decline

The drop in oil prices has exacerbated Russia’s financial woes. The Ministry of Finance's data revealed that Russia's oil and gas revenues fell by 25% in 2025, a shortfall that created a significant fiscal gap.

This is a stark contrast to the initial budget expectations, which were based on higher oil prices. In response to this, the Kremlin began selling foreign currency and gold assets at an alarming rate of 12.8 billion rubles per day.

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If market conditions remain the same, Russia may end up depleting up to 60% of its remaining liquid reserves in 2026 to finance state expenditures. The government's fiscal deficit for 2025 hit 5.7 trillion rubles, five times larger than initially planned.

With no significant recovery in oil prices in sight, Russia faces an ongoing financial crisis that could worsen in the coming years.

Conclusion

The sale of gold from Russia’s National Wealth Fund underscores the severity of the country’s ongoing financial crisis. With sanctions, a shrinking oil market, and military expenditures draining the economy, Russia's financial outlook remains precarious.

As the country continues to sell off its reserves, the future of its sovereign wealth remains uncertain.

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FAQ

Why is Russia selling its gold reserves?

Russia is selling its gold reserves to finance its war efforts and cover the growing budget deficit caused by sanctions and falling oil prices.

How much of Russia's gold reserves have been sold?

Russia has liquidated 71% of its gold reserves from the National Wealth Fund, reducing its stock from 554.9 tons to just 160.2 tons.

What are the main reasons behind Russia’s financial troubles?

The financial troubles stem from international sanctions, a significant drop in oil prices, and the ongoing costs of the war in Ukraine.

How much more gold may Russia sell in 2026?

Russia is estimated to spend up to 60% of its remaining liquid reserves in 2026, potentially liquidating more gold and foreign currency assets.

What does this mean for Russia’s future financial stability?

The continued depletion of sovereign reserves signals further financial strain, making Russia’s long-term fiscal stability uncertain without a recovery in oil revenues.

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