Russia Gold Reserve Broke the Record
Russia last year increased its reserves of monetary gold to a record level. According to the Central Bank, they amounted to 2112 tons. In money, this is almost $ 87 billion or about one fifth of all international reserves. Earlier it became known that the Central Bank reduced to a minimum investment in US bonds and the dollar and increased the share of the euro and the yuan. Thus, the Russian Federation is preparing for possible sanctions and problems in the global economy.
The volume of monetary gold in the international reserves of the Russian Federation as of January 1, 2019 amounted to 2,112 tons (67.9 million troy ounces). This is equivalent to $ 86.9 billion, according to data from the Bank of Russia, published on January 18.
Compared with the beginning of last year, the gold reserves increased by 14.9%. As of January 1, 2018, it was 1,838 tons (59.1 million troy ounces). Thus, for the year, the Central Bank acquired 274 tons of gold.
The share of gold in international reserves at the end of last year was 18.6%. At the beginning of last year, this figure was 17.7%. The total amount of reserves increased by 8.3% ($ 35.8 billion) in 2018 and reached $ 468.5 billion.
The Ministry of Finance has not yet published the full statistics on the production of precious metals over the past year, but data for ten months shows an increase. Gold production in Russia in January-October 2018 amounted to 264.99 tons against 261.17 tons in 2017.
In addition to purchases of gold, the Central Bank last year reduced its investments in US Treasury bonds to $ 14.6 billion (as of October 2018). The maximum level of Russian investments in American securities reached in October 2010 and amounted to $ 176.3 billion.
It is worth noting that at least the investments in the US state debt amounted to $ 14 billion. In September-October, it grew slightly, but experts considered this a technical point.
According to experts; another element of the reduction of dollars in reserves is the buildup of assets in other currencies. In the “Review of the Central Bank’s asset management activities in foreign currencies and gold”, which was released in January of this year, it is reported that the share of dollar-denominated assets in gold and foreign exchange reserves decreased from 46.3% on June 30, 2017 to 21.9% on June 30 2018 year.
The share of the euro increased from 25.1% to 32%. The main increase came in the yuan – in the middle of last year it accounted for 16.7% of reserves, whereas a year earlier the share of Chinese currency was 0.1%. The share of other currencies (pound sterling, Japanese yen, Canadian and Australian dollars) also increased from 12.4% to 14.7%.
At the same time, Prime Minister Dmitry Medvedev emphasized that “the dollar is undoubtedly the most important world currency, the most important reserve currency, and there will be no prohibition on the dollar’s circulation in our country, of course, within the limits established by law”.
During his speech at the Gaidar Forum on Wednesday, January 15, he expressed the opinion that the tendency of the world’s refusal to settle in dollars would only increase. In his opinion, the United States itself is provoking dedollarization by its actions.
“A country whose monetary unit is a key reserve currency, it also destroys trust in it,” said Medvedev.
The prime minister added that the paradox of the situation is that the idea of dedollarization receives incentives from the issuer itself.
Russia has joined the “growing number of countries that are fighting back the hegemony of the American currency,” and has achieved some success here, The Wall Street Journal newspaper notes.
“Russia is trying to abandon the dollar at a time when its economy is feeling the pressure of US sanctions, the country is preparing for new restrictions, which are expected to be introduced at the end of this month,” the newspaper writes.
According to the WSJ, “dedollarization, supported by Russian President Vladimir Putin and the Russian Central Bank, should help soften the blow if Western sanctions are aimed at the financial system.”