--- title: "Reduction of Russia's Gold Reserves: Budget Deficit and War Drain Resources" description: "In September 2026, Russia reduced its gold reserves to a low not seen since 2019 amid a budget deficit and war spending against Ukraine." date: 2026-10-29T03:35:18.309Z lang: en url: https://xab.info/en/posts/reduction-of-russia-gold-reserves-2026 tags: [russia, gold-reserves, economy, budget-deficit, sanctions, ukraine-war] author: "Darya Fomina" publisher: "XAB.info" --- # Reduction of Russia's Gold Reserves: Budget Deficit and War Drain Resources ![Shiny gold bars lie in neat rows inside a bank vault](https://xab.info/media/2026/10/29/sokrashchenie-zolotyh-zapasov-rossii-2026/sokrashchenie-zolotyh-zapasov-rossii-2026-1.webp) ## Key Points - In September 2026, Russia's gold reserves dropped to their lowest level since late 2019. - The physical volume of gold decreased by 6.2 tonnes in a month to 2.26 thousand tonnes. - The Finance Ministry sells National Wealth Fund gold and currency to the Central Bank to cover the deficit. - Sanctions from 2022 leave gold and yuan as primary available operational instruments. In September 2026, Russia reduced the physical volume of its monetary gold to its lowest level since the end of 2019. According to the Foreign Intelligence Service of Ukraine, the Central Bank of the Russian Federation decreased its gold reserves amid a widening budget deficit, falling oil and gas revenues, and significant expenditures on the war against Ukraine. This trend reflects increasing financial pressure on the state system and shrinking opportunities to replenish the treasury. ### Dynamics of Gold Reserve Reduction According to the agency, in September the Central Bank of Russia continued the trend of reducing the physical volume of gold reserves, which has been recorded for the tenth consecutive month. In a single month, reserves decreased by 6.2 tonnes to 2.26 thousand tonnes. Overall, since December 2025, the reduction has reached approximately 62 tonnes, or about 2.7 percent of the total volume. Along with the physical decrease in the mass of the metal, its dollar value has also declined. In September and October, the total value of monetary gold in the reserves dropped from $333.5 billion to $301.6 billion. This decline was driven both by direct asset sales and by market price fluctuations and asset revaluation. Meanwhile, the country's total international reserves as of October 9 were estimated at $723.5 billion, which is $45.5 billion lower than at the beginning of September. ### Mechanisms for Financing the Deficit The Russian government is forced to tap previously accumulated reserves due to the growing budget gap. As traditional oil and gas revenues decline while government spending remains high, the Russian Ministry of Finance sells gold and currency assets from the National Wealth Fund to the Central Bank in exchange for rubles. In turn, the Central Bank conducts corresponding operations on the domestic market using remaining liquid instruments, such as Chinese yuan and gold. Current international sanctions significantly narrow Moscow's room for maneuver. A significant portion of the Central Bank's foreign assets has been frozen since 2022, making gold and yuan the key available resources. Consequently, the total volume of declared international reserves does not reflect the actual amount of liquid funds that the Russian authorities can freely dispose of under current conditions. ### Economic Consequences and Risks The sale of gold temporarily covers state expenditures without a sharp increase in domestic borrowing or an immediate reduction in budget programs. However, gold reserves cannot fully replace permanent tax and export revenues. According to experts and intelligence assessments, the continuation of this policy amid the current deficit level will force authorities to resort to tax hikes, increased borrowing, or budget sequestration. At the same time, international analytical centers, including Danish intelligence, point to general signs of severe strain in the Russian economy. Financial constraints are intensifying as military spending continues to absorb a substantial share of state resources against the backdrop of a shrinking revenue base. ## Fact-Check & Sources - [Война и падение доходов вынуждают Кремль распродавать золотые запасы](https://www.rbc.ua/ukr/news/viyna-ta-padinnya-dohodiv-zmushuyut-kreml-1793243418.html) - The article is fully based on the official report by the Foreign Intelligence Service of Ukraine regarding the reduction of Russia's gold reserves in September 2026. ## FAQ ### What are Russia's gold reserve volumes as of September 2026? The physical volume of Russia's gold reserves in September 2026 stood at 2.26 thousand tonnes, having decreased by 6.2 tonnes over the month. ### Why is the Russian government selling off its gold reserves? The sell-off is driven by a growing budget deficit, falling oil and gas revenues, and massive expenditures on the war against Ukraine amid active sanctions. ### What alternative measures might be required if reserves are depleted? If the budget deficit persists, Russia will have to increase borrowing, raise taxes, or cut government programs.