Wednesday , July 28 2021

Russia turns dollar into gold



Central banks around the world stack gold as an alternative to the US dollar and Russia is at the forefront of this. This was contributed by geopolitical tensions, sanctions of war and, above all, the desire for dedolarization.

Statistics from the World Gold Council (VGC) show that demand for gold rose by 42% between central banks in the first quarter of 2018.

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

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

Kazakhstan reserves (14.4 tons), India (13.7 tons) and Poland (13.7 tons) increased gold reserves.

For the first time in the modern history of Russia, state reserves of gold have exceeded two thousand tons. Recently, in the course of the year Nikit Khrushchev, in 1962, Moscow was able to boast of such a quantity of gold.

Now, Russia's share in world gold reserves is 17 percent, while Russia's stock is estimated at more than $ 78 billion.

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 "protecting against legal and political risks in one place". The increase in the share of gold in foreign reserves reduces the share of dollars and the euro. The Russian authorities believe that it is better to have more gold resources than dollars. Hypothetically speaking, if Russia holds tons of US dollars and the US wants to harm its economy, it could be through currency manipulation, which is why it is a golden guarantee against such a scenario, experts say.

"This is a long-term strategy that is not in use for the first year, but now it's pretty active. We previously had US securities worth hundreds of billions of dollars – we invested over $ 176 billion in 2010, but now we have just a little more than ten billion We almost closed this story As for the gold reserves, we are most often increasing them. Fortunately, we make ourselves gold and do not import, as some countries do. For example, Turkey imports a lot of gold from Venezuela Gold is our stable source, which we maintain very well, "said Russian politician Andrej Suzdaljtsev to Sputnik.

The Central Bank began to sell US government bonds after the US imposed sanctions on Moscow and when it was threatened that Russia would be excluded from the international billing system, this year, for the first time in the post-Soviet history, China surpassed the amount 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), then the IMF (more than 2,8 thousand tons), Italy (2,45 thousand tonnes) and France (2.43 thousand tonnes). Russia is in fifth place.

Otherwise, Russia buys gold, which is mostly excavated in its territory, and produces about 300 tons per year and according to that indicator only lags behind China and Australia.

(Sputnik)


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