Thursday , June 17 2021

Russia turns dollars into gold

Central banks worldwide stack gold as an alternative to US dollars, and Russia is at the forefront of it. This contributed to geopolitical tensions, the war of war and, above all, the desire for dedolarization.

World Gold Council (VGC) statistics show that demand for gold increased by 42% in the first quarter of 2018 among central banks.

During this period, central banks bought a record amount of gold over the last four years and it turned out that Russia's Bank was the largest buyer.

Statistics show that central banks bought over 148 tonnes of gold in the last quarter, which is 22 percent more than in the same period in 2017. The absolute record maker is Russia, which bought 99.2 tonnes, followed by Turkey by 18.5 tonnes.

Kazakhstan's reserves (14.4 tonnes), India (13.7 tonnes) and Poland (13.7 tonnes) increased their gold reserves.

For the first time in Russia's modern history, the state's reserves of gold exceeded two thousand tons. For the last time, Moscow could boast such a quantity of gold in 1962 under Nikita Khrushchev.

Now Russia's share of world reserves of gold is 17 percent and the value of Russian shares is estimated at over 78 billion dollars.

The increase in gold reserves allows Russia to diversify reserves in currencies due to the deterioration of relations with the United States. Experts explain that gold is a "one-stop protection against legal and political risks". Increased share of gold in foreign exchange reserves reduces the share of dollars and the euro in the Russian central bank. The Russian authorities consider it better to have more gold resources than dollars. Hypothetically, if Russia has a lot of US dollars and the United States wants to hurt its economy, it would be possible through currency profiling, so it's a golden guarantee against such a scenario, experts say.

"This is a long-term strategy, which does not apply for the first year, but is now quite active. In the past, we held hundreds of billions of dollars in US securities – over $ 176 billion was invested in 2010 and now we have just over ten billion. history. In terms of gold reserves, we are increasing most of the time. Fortunately, we produce gold, and we do not import, as some countries do. For example, Turkey imports a lot of gold from Venezuela. Gold is our stable resource, which we are very good, said Russian politician Andrej Suzdaljtsev to Sputnik.

The central bank began to sell US government bonds after the US imposed sanctions against Moscow and when it was threatened that Russia would be excluded from the international billing system, this year for the first time in post-soviet history China surpassed through the volume of gold reserves.

Recall that the United States still has the highest gold reserves in the world – more than eight thousand tons, followed by Germany (more than 3.3 thousand tons), since the IMF (more than 2.8 thousand tons), Italy (2.45 thousand tons) and France (2.43 thousand tons). Russia is in fifth place.

Otherwise, Russia buys gold as the most excavated on its territory, producing around 300 tonnes per year, and according to that indicator, it is only behind China and Australia.


Source link