Is Russia Pulling Money Out of U.S. for Safekeeping?

http://www.businessweek.com/articles/2014-03-14/is-russia-pulling-money-out-of-u-dot-s-dot-for-safekeeping#r=nav-r-story

There’s circumstantial evidence that Russia may have yanked tens of billions of dollars in assets out of a custodial account at the U.S. Federal Reserve, possibly to keep it from being frozen by U.S. authorities in case of heightened conflict in Ukraine. The Federal Reserve holds U.S. Treasury securities in custody on behalf of foreign central banks and other official institutions. It’s a decline of $105 billion, or 3.5 percent, from March 5 to March 12. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, suspects Russia accounts for a big share of the draw-down. “It’s just to avoid being frozen,” Chandler says, not a protest against the U.S. He adds, ”You don’t let your politics dictate these decisions.” In a note to clients, Chandler wrote, “The logic now is that Russia is bracing for the next round of sanctions.” He pointed out that this has happened before. In 1957, Russia shifted dollars from the U.S. to London, he said, fearing the U.S. would punish Russia financially for its invasion of Hungary.