Russia to Increase Its Gold Reserves – to $500 Billion

from Sputnik News The head of Russia’s Central Bank is determined to increase the country’s gold reserves to its previous levels in 2012-2013, from $360.5 billion up to $500 billion. Russia will increase its gold reserves by up to $500 billion, said Elvira Nabiullina, the head of Russia’s Central Bank, Rossiyskaya Gazeta reported. Russia will aim at $500 billion, despite the fact that a sufficient level of gold reserves for the country is $188 billion, Nabiullina said. Currently, Russia owns $360.5 billion worth of gold reserves. The amount covers more than three months of imports, short-term foreign debt and 20 percent of Russia’s entire money supply. The country’s gold reserves exceeded $500 billion during 2012-2013, when global oil prices were at their peak. However, right now due to low oil prices, the Russian budget will receive $150-170 billion a year compared to a few years ago before the crisis.

“Recent experiences forced us to reconsider some of our ideas about sufficient and comfortable levels of gold reserves,” the head of the Central Bank said, adding that the Russian economy needs the amount of gold reserves to be able to cover negative capital outflow for the next 2-3 years.

Russia will accumulate its gold reserves gradually in order to avoid high inflation, Nabiullina concluded. Bonus>>> Americans Fear Beijing, Moscow May Introduce New Gold Standard China is planning to introduce the gold fixing reference price in yuan. Americans fear that China could introduce a new gold standard to displace the dollar, DWN reported. The competition for London gold-market has grown after the Chinese Shanghai Gold Exchange (SGE) established an International Chamber of Commerce in the free trade zone of the city, providing for free capital flows, Deutsche Wirtschafts Nachrichten reported.

“The central government is gradually opening up the gold market by allowing more participants to trade,” Bloomberg cited a senior gold analyst at Industrial Bank Co. in Shanghai, Jiang Shu.

China is the world’s largest gold producer and is, logically, interested in the possibility to influence the determination of the gold price. According to a market participant, China will have its fixing price before the end of the year, with the country experiencing a rapid development of its gold market, Financial Times reported. Chinese mining companies and refineries which store their assets abroad are expected to transfer their amounts of precious metals back to China. In March, the government in Beijing had largely lifted restrictions on the import and export of gold to facilitate precious metals trading among domestic dealers. The move raised concerns in the United States. In recent years, China has purchased a lot of gold contrary to the international trend and the US fears that Beijing and Moscow could work together to introduce a new gold standard, the article said.

Sharing is caring!