Page 50 - RusRPTAug19

2018, Russia bought 274.3 tons of gold. Gold purchases were financed by the Bank of Russia’s almost complete sale of a US Treasury bond portfolio, the organization’s report said.
The Central Bank mainly purchases gold from domestic producers. Moscow, buying gold, is seeking to reduce its dependence on the US dollar in the event of extension of sanctions by the United States.
Since February 2017, the government started to convert its O&G surplus into FX on a regular basis. These funds were then kept in a special account in the Central Bank of Russia and then – once the fiscal year was over and budget execution was approved by the parliament – transferred into NWF. As a result, the first and major implication from this policy shift was an accelerated rebuilding of Russia’s international reserves in the government part (NWF). Including funds that have been set aside for a transfer into NWF but have not yet been officially reported, the gross volume of Russia’s international reserves has grown from $378bn in January 2017 to over $580bn on 1 June 2019. The Reserves/GDP ratio has jumped from 29% in early 2017 to 35% in mid-2019. A year ago, in July 2018, Russia’s gross reserves have outstripped its gross foreign debt for the first time in its modern history; on 1 April, 2019, total debt of Russia Inc. was only 82% of what the country had in its reserves.
Rising gold prices and Russia’s efforts to boost its bullion holdings have led the country’s gold reserves to rise to more than $100bn, Finansovaya Gazeta reported. In June alone, Russia added more than 18 tons of the precious metal, authorities said in a report. June’s gold purchases brought Russia’s gold reserves to a total of 2,208 tons, according to the latest data released by the Bank of Russia. This meant Russia was sitting on a mountain of gold valued at $100,277.6mn as of July 1, the report shows. Since the beginning of the year the national holdings of the precious metal have been increased by around 96.4 tons amid Moscow’s push to de-dollarize its foreign exchange reserves. More than 6 tons were added to Russia’s coffers in May, around 16 tons in April, and a further 18 tons in March. The biggest gold buying spree came in February, when Russian gold reserves rose by more than 31 tons in one month. During the first month of the year 6 tons of gold were added. Last year, Russia was crowned the most committed purchaser of gold as it acquired almost 275 tons, the largest amount ever purchased in a single year, according to the World Gold Council. Moscow used to be one of the largest investors in US Treasury securities, but has dumped much of them in recent years. Russia’s holdings of US debt are currently at the lowest level since May 2007 totaling $12.024bn. Last year, Russia reduced its holdings by more than 85%, from $96.9bn in January to $13.2bn in December.
50 RUSSIA Country Report August 2019 www.intellinews.com