Russia quietly hoard gold
With this data, the Swiss overcame Russia and China to become the 6th gold reserves in the world. This is part of a strategy to diversify Russia’s foreign exchange reserves, which rose 439 billion. The reason is dollars and euros accounted for most of this storage volume.
However, despite the large amount of gold, the precious metal still accounts for only 9.7% of the total reserves of Russia, by the end of May 8. Although recent Russian Central Bank sold a lot of foreign currency to prevent Rouble discount.
Russia is the country with the 6th largest gold reserves in the world. Photo: Newswire
Yesterday, Ms. Kseniya Yudaeva – Vice President of the Central Bank of Russia has pledged to sell gold to finance the import of goods “if necessary”. The country is worried imports expensive, low prices Rouble after international sanctions on Russia on the situation of Ukraine.
Russia’s international reserves fell by 509 billion projected earlier this year, to 439 billion last month, Russian buyers rouble to prevent the domestic currency against the dollar and euro. This has given rise to concern if further sanctions and Russia’s reserves went down, the ability to import essential commodities of the country will be threatened.
Former Russian finance minister – Alexei Kudrin also warned about this in the last month Kommersant. He said that the current reserve enough to import only 6 months, with the current price.
6 months is a milestone to ensure that the Russian people at risk situation worse and they can not import more foreign goods. Currently, Russia has to import large quantities of butter, cheese and meat.
Yudaeva said that Russia may have to sell gold to have enough dollars to serve the import. However, unfortunately, the price of gold is falling, down to $ 1,140 an ounce this morning, the lowest of 4.5 years.
Markets are also worried about Russia’s revenues when oil prices to below $ 90 a barrel – benchmarks have to balance the budget of this country. Oil has contributed nearly half the budget revenues and 10% of Russian GDP.
Russian Finance Ministry is planning to reduce 10% of the budget period 2015-2018. Finance Minister Anton Siluanov said that although the government may use reserves to meet spending needs, but reserves are not infinite, while the weak financial condition may persist.