Russia has begun selling physical gold from its central bank reserves for the first time in 25 years, according to a report by Berlin-based news outlet bne IntelliNews, as the government seeks to plug a growing budget deficit driven by continued military spending.The report said regulatory data shows that between 2022 and 2025, Russia sold more than 15 trillion RUB ($150 billion) worth of gold and foreign currency, followed by an additional 3.5 trillion rubles ($35 billion) in the first two months of 2026. In January alone, the Central Bank of Russia sold 300,000 ounces of gold, followed by 200,000 ounces in February.The move marks a significant change in reserve management. Earlier, gold transactions were largely fictitious, involving transfers between the finance ministry and the central bank without physical movement of bullion. However, in recent months, the central bank has started selling actual gold bars in the market.As a result, Russia’s gold holdings have fallen to 74.3 million ounces, the lowest level in four years. The disposal of 14 tonnes in January and February is the largest two-month sale since the second quarter of 2002, when 58 tonnes of cargo was unloaded in a single tranche.This sale comes at a time when Russia’s fiscal position is under increasing pressure. Berlin-based bne IntelliNews reported that the government ended 2025 with a budget deficit of 2.6 percent of GDP, compared with the initial estimate of 0.5 percent. Economists estimate the real deficit could be closer to 3.4 percent, with some payments deferred to 2026 to narrow the reported gap.Weak oil prices and tightening US sanctions in the second half of the year have increased pressure on the budget, causing oil and gas tax revenues to contribute about 20 per cent of total revenues – about half of pre-war levels.The decision to sell gold has also been influenced by the sharp rise in bullion prices above $5,000 an ounce. The surge has pushed Russia’s international reserves to more than $809 billion as of Feb. 28, including nearly $300 billion of assets seized in the West, according to the Central Bank of Russia. Of this, the value of gold reserves alone is approximately $384 billion.According to World Gold Council data, Russia currently holds more than 2,000 tonnes of gold, making it the world’s fifth-largest sovereign holder. The country had built up these reserves over the years to reduce reliance on dollar-denominated assets, especially after sanctions imposed following the annexation of Crimea in 2014 and further tightened in 2022 following the invasion of Ukraine.From 2022 onwards, the Finance Ministry has relied on multiple funding channels to manage budget pressures. These include withdrawals from the National Welfare Fund, which still holds about 4 trillion RUB, the issuance of domestic OFZ treasury bonds, and raising value added tax rates, which account for about 40 percent of government revenues.The change in physical gold sales suggests Russia is now tapping its liquid reserve buffers more directly, underscoring growing fiscal strains as the conflict in Ukraine continues into its fourth year.
