Russian Central Bank Drains Gold For the First Time Since 2002 as War Deficit Mounts

Russia has begun selling physical gold from its central bank reserves for the first time in nearly 25 years to cover a persistent budget deficit, The Moscow Times reported on March 24.

The Central Bank of Russia (CBR) offloaded 500,000 ounces—roughly 14 tons—of gold in January and February 2026, marking its largest bullion sale since 2002.

According to The Moscow Times, the liquidation follows a federal budget deficit that surpassed 15 trillion rubles ($184 billion) between 2022 and 2025, with an additional 3.5 trillion ruble ($43.1 billion) gap recorded in just the first two months of this year.

While the Kremlin previously engaged in “virtual” internal gold transfers to fill the treasury, the current shift to physical market sales signals a desperate need for liquidity as Russian leader Vladimir Putin continues to prioritize military spending over economic stability.

The CBR is reportedly offloading gold to avoid depleting its remaining reserves of Chinese yuan, which analysts describe as the last liquid currency available to influence the ruble’s exchange rate. With roughly $300 billion in Western assets frozen and statistics regarding the structure of the remaining reserves classified, the central bank is forced to capitalize on record-high gold prices—which reached $5,600 per ounce in January.

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However, experts cited by The Moscow Times estimate that the 120 billion rubles ($1.4 billion) generated in January covers a mere 3% of the projected annual deficit.

The Kremlin’s fiscal stability has faced unprecedented pressure as the 2026 budget cycle projects a deficit nearly double that of the previous year. In early March, Russian war spending has officially surpassed all social welfare allocations, forcing the government to tap into the National Welfare Fund at a record pace.

Currently, as Russian leader Vladimir Putin seeks to maintain the offensive in Ukraine, the depletion of liquid assets in the “war chest” has left the Russian Central Bank with few options beyond the liquidation of its gold holdings and the remaining yuan reserves.

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