Russia's gold reserves record replenish

02 Jun 2016

Russia's central bank continues to increase gold reserves. Last year, it bought a record amount of precious metal for reserves – 206.4 tons. As a result, the share of gold in reserves exceeded 13 percent. In net weight it is 1414.6 tons. The Bank of Russia is one of the few Central banks in the world, which continues to increase the amount of gold in their reserves. Experts believe that it is a very up-to-date phenomenon. “Buying gold in reserves really makes sense now”, Sergey Kashuba, Head of the Russian Union of gold producers, says. “It is useful from the point of view of diversification of reserves. Besides that, it provides a good support to the home-produced branch which develops and pays taxes”.

Today the Central Bank is forced to provide such aggressive increase of gold in reserves by the economic conditions themselves, which are to be taken into consideration, Sergey Kashuba adds. The needs of the jewelry industry after recession in demand for its products declined. “Export of metal, which is associated with currency risk, customs difficulties and transport costs, is not profitable and continues to fall; in 2015, it was only 34 tons as opposed to 56 tons in 2014.

In addition, the production remains at a high level - last year, the increase was two percent, although experts expected no more than one. “The Central Bank needs to take advantage of the situation and to continue to increase gold reserves,” Kashuba says.

Besides Bank of Russia, the Central Bank of Kazakhstan makes investments in gold; in a year it increased the share of precious metal in the reserves by almost 30 tons up to tons of 221.8, whereas the Central Bank of Jordan – 18 plus tons, and Malaysian bank – two-plus tons. A little more than one and a half tons was bought by the European Central Bank. But China has the most rapid replenishment of gold reserves – more than 708 tons.
In such countries as the USA, Italy, France, traditionally world leaders in terms of gold reserves, the volume of the noble metal has not changed during the year. And Germany, one of the key figures of the rating, even reduced the amount of gold in the reserves, having sold about three tons.
Russia occupies the sixth place of the world gold reserves volume rating. But if requested, Russia may claim for higher positions, experts say. Especially as the country has the resources needed. Sergey Kashuba says that Russia occupies the second place of the world rating in terms of gold reserves in situ, coming after the South African Republic. They are estimated at 13.1 thousand tons.

“China comes in third. But this country has a thousand-years history of precious metal mining, and we have only a few hundred years. And whereas China is forced to seek its gold already on the bottom of the sea, the Russian miners continue to develop traditional deposits,” – Kashuba says to Rossiyskaya Gazeta.

Source: Rossiyskaya Gazeta