What's really there?

By G.S. and C.W. | LONDON

RUSSIA’S currency has dived this year: since January it has lost about 40% of its value against the dollar. To slow the rouble's fall, the central bank has been raising interest rates: yesterday it did it for the fifth time (the rate now stands at 10.5%). High interest rates are dragging on economic growth: Russia is on the verge of recession.

The central bank has also been buying roubles with its foreign-exchange reserves. They have fallen sharply this year (nearly 20%) but still seem gargantuan. According to the central-bank website, in November Russia had $419 billion-worth of reserves. Even after this year’s drop, only a handful of countries have bigger reserves than Russia.

But Russia’s official figures do not tell the whole story. About $170 billion of its assets sit in two big wealth funds, the Reserve Fund (worth about $89 billion) and the National Wealth Fund (worth about $82 billion). But much of what is in these funds could prove inaccessible if called on to meet short-term financing needs.

Some people allege that the National Wealth Fund is tied up in long-term infrastructure projects, which mean that the fund is entirely illiquid. Meanwhile much of the Reserve Fund is used for buying equity in Russian state banks, which again makes those assets much less liquid than cash.

But how much is really accessible to the Kremlin is anyone’s guess. “In reality”, says Anders Aslund of the Peterson Institute for International Economics, a think-tank, “Russia’s effective international reserves are only $203 billion.” Other economists, including an ex-finance minister of Russia, have come up with similar figures. People at the central bank dispute this fiercely, as do some credit-rating agencies. We have put our estimate in the chart. Like so much else in Russia, it is impossible to know for sure.