Russia has begun to sell off its strategic gold reserves to offset the growing budget deficit brought on by Western sanctions, falling oil prices and economic problems that are getting worse, according to Kyrylo Shevchenko, former Governor of the National Bank of Ukraine.

“Russia is now selling its strategic gold reserves — something the Central Bank avoided for decades,” Shevchenko wrote on social media. He said the sales are being used to support the weakening ruble, fill liquidity gaps at state-owned enterprises, and cover widening budget shortfalls as alternative funding sources diminish.

Russia’s National Wealth Fund — the sovereign vehicle originally designed to stabilise the federal budget in periods of low oil revenue — has seen its liquid assets fall from $113.5bn to $51.6bn since 2022. Gold holdings within the fund have dropped 57%, from 405.7 tonnes to 173.1 tonnes over the same period.

The depletion comes as the Kremlin faces mounting financial strain from continued military operations in Ukraine, coupled with reduced energy export revenues and restricted access to international capital markets. “The National Wealth Fund, Russia’s main ‘war-time piggy bank’, is shrinking fast,” Shevchenko noted.

According to his estimates, Moscow may sell up to $30bn (230 tonnes) in gold during 2025, with a further $15bn (115 tonnes) possible in 2026. If realised, these sales would mark one of the largest sustained disposals of sovereign gold by a major economy in recent history.

While the Russian Ministry of Finance has not confirmed such plans, previous budget updates have signalled a growing reliance on asset sales to plug fiscal gaps. Gold — held outside the international banking system and less vulnerable to sanctions enforcement — offers a politically expedient option for liquidity generation.

“The scale of gold sales suggests that reserve depletion is accelerating under sanctions,” Shevchenko said, warning that the trend may limit Russia’s ability to manage further economic shocks.

Russia started building up its gold reserves in 2007, forcing domestic gold producers to sell to the Central Bank of Russia (CBR) and built up a huge stock pile that makes up about a third of the central bank reserves. Those reached a peak of around $600bn on the eve of the Ukraine war, but since then have topped $700bn (including the $300bn frozen in the West) that is largely due to the dramatic appreciation in the price of gold which has broken all records this year. that has provided the Kremlin with at least a $100bn windfall that the Ministry of Finance (MinFin) is now tapping to plug budget holes.