Russia’s Finance Ministry to decide on oil industry taxation by end of FebruaryBusiness & Economy January 16, 15:16
Funeral ceremony for Tu-154 crash victims held at military memorial cemetery near MoscowSociety & Culture January 16, 14:57
Russian combat engineers defuse over 20,000 munitions in AleppoMilitary & Defense January 16, 14:41
Kremlin: Russia is not going to groundlessly accuse other countries of cyberattacksRussian Politics & Diplomacy January 16, 14:30
Russian Helicopters sign first contract for civil products supply to PakistanBusiness & Economy January 16, 14:25
Montenegro accuses Russian national of inciting assassination plot against ex-premierWorld January 16, 13:48
IAC commission to join investigation of Bishkek air crashWorld January 16, 13:38
Kudrin says pension age should be raised starting from 2019 in RussiaBusiness & Economy January 16, 13:32
Flight recorder recovered at crash site of cargo Boeing-747 near Bishkek — sourceWorld January 16, 13:28
This content is available for viewing on PCs and tabletsGo to main page
MOSCOW, February 4. /TASS/. Financial analysts polled by TASS attribute Russia’s efforts to build up gold production and the CBR’s (Central Bank of Russia) growing gold purchases to dwindling confidence in the US dollar and a wish to establish a safety net for the national economy.
On Tuesday, Natural Resources Minister Sergey Donskoy said: "Russia’s gold production is soaring to new highs. According to my estimates, the annual gold output will be up to above 300 tons in 2015. This will happen mostly with the involvement of gold deposits in the Far East and in southern Siberia into production."
At the moment, Russia’s gold reserves stand at 1,200 tons.
The Bank of Russia last year stepped up gold purchases considerably. According to the WorldGoldCouncil (WGC), Russia since the beginning of 2014 built up its gold reserves by 115 tons. In contrast to this, in 2013, according to the CBR’s annual report, its gold assets went up by 80 tons. As a result, according to CBR statistics, on January 1, 2015 monetary gold (rated according to the current CBR quotations) stood at 39,989.9 troy ounces, or 10% of the country’s gold and foreign exchange reserves.
"To say whether this amount — 1,200 tons — is big or small, one should remember that various countries around the world have accumulated approximately 22,000 tons of gold. The United States has the largest gold reserve of all — 8,000 tons. Germany keeps 3.4 tons, France and Italy, 2.4 tons each, and China and Russia, 1,200 tons each. In other words, the wish to diversify the gold and foreign exchange reserves is a general trend on the world financial markets, and Russia follows it," the head of Vneshtorgbank’s observer council, former CBR governor Sergey Dubinin, told TASS.
"Growing gold production in Russia and build-up of the CBR’s gold reserves is a sure sign the government’s financial segment is keen to protect the available reserves from devaluation and other negative phenomena stemming from the economic crisis and anti-Russian sanctions," Dubinin said.
"The dollar, just as the ruble, is credit money, with no gold equivalent to rely on. The US authorities in 1976 abandoned the US dollar’s pegging against gold, so certain distrust towards the American currency remains. Gold is a highly liquid item taking very little space to store. It is sold through electronic trading and on finance markets, although its price is vulnerable to great volatility. Nevertheless, respect for this precious metal, just as to platinum, remains high. It is an investment instrument that has stood the test of centuries," Dubinin said.
"The gold has its weaknesses, though. It is not an alternative to convertible currencies — the dollar, the pound sterling, the euro, the yen and the Swiss franc. It is rather a safety net for the economy. It is not accidental that China, while building up the production and the amount of gold in its state vault, keeps $3.7 trillion in US treasuries," Dubinin said.
"The Central Bank is determined to strengthen the structure of its international reserves by increasing the gold component. Gold as an asset is rather stable during crises. Naturally, the CBR seeks to increase its share by all means. The Central Bank’s intention to ease Russia’s dependence on the dollar and the euro within the framework of the gold and foreign exchange reserves is quite reasonable in the current situation," Deutsche Bank’s chief economist in Russia, Yaroslav Lissovolik, told TASS.
"Russia today is one of the world’s leaders in terms of gold reserves and judging by the CBR’s current policies, it has no intention to quit its position," he said.
"The Central Bank demonstrates its intention to increase the share of gold in its reserves to the maximum extent and to minimize dependence on foreign currencies, in particular, the mono-currency, the dollar. The CBR has achieved a great deal in this respect: the dollar and euro shares in its reserves are approximately equal. Also, considerable assets in other currencies have been accumulated," the president of the Association of Russian Banks, Garegin Tosunian, told TASS.
"The intention to store more gold is reasonable not only for the state, but also for the individual, because it is a reliable asset "immune to corrosion". Also, money emission and the stability of the entire financial system depend on the size of gold and foreign exchange reserves," Tosunian concluded.
TASS may not share the opinions of its contributors