Russia has begun selling off gold due to budget deficit – intelligence

After years of accumulating gold and foreign exchange reserves, Russia has shifted to selling them off amid a growing budget deficit. This was reported by the Foreign Intelligence Service, according to UNN.

According to the agency, in the first quarter of 2026, the Central Bank of the Russian Federation sold about 21.8 tons of gold. As a result, the total volume of reserves decreased to 2,305 tons. It is noted that to cover the budget deficit, estimated at nearly $62 billion, the precious metal has effectively become one of the key financial resources.

From Accumulation to Sell-off

The transition to selling off reserves began as early as November 2025. At that time, the Central Bank of the Russian Federation first began selling gold to domestic buyers—banks, state-owned companies, and investment structures. The proceeds are mostly converted into yuan due to Russia's limited access to international financial markets.

As noted, between 2002 and 2025, Russia actively increased its gold reserves, purchasing over 1,900 tons. The most intensive periods occurred in 2008–2012 and 2014–2019. However, after 2020, the pace of accumulation slowed sharply and subsequently reversed.

Gold as "Fast Money"

A sharp increase in gold transactions is already being recorded on the domestic market. In March, trading volumes reached 42.6 tons—3.5 times higher than last year. A significant portion of the transactions takes the form of swap deals, where gold is used as collateral to obtain short-term liquidity.

Intelligence officials explain that these steps were prompted by a drop in oil and gas revenues in early 2026 amid high military and social spending. Due to limited access to external financing and rising domestic debt, the Kremlin is forced to use accumulated reserves.

Risks to the Economy

Estimates suggest that at current rates, Russia could sell between 80 and 90 tons of gold during 2026. While this does not create an immediate crisis, it indicates deteriorating financial stability and a narrowing of options for budgetary maneuvering.

The Foreign Intelligence Service emphasizes that the shift in approach itself—from accumulation to sell-off—is indicative of the state of the Russian economy. While gold was previously viewed as a strategic reserve, it is now increasingly being used to cover current expenses.

Furthermore, the active use of gold swap operations indicates a liquidity deficit within the Russian financial system. In effect, the precious metal has begun to be used as a tool for rapid fundraising.

The agency underscores that such a practice does not solve the structural problems of the economy but only postpones them. These problems include the budget's dependence on raw material exports, rising military spending, and limited opportunities to attract external financing.

Thus, the Kremlin's current policy demonstrates an attempt to maintain financial stability in the short term; however, in the long run, it could lead to further depletion of reserves and increased economic risks.

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