Page 53 - RusRPTSept19

5.2.4 Gross international reserves
Russia gross international reserves (GIR) were $527.7bn as of August 23,
the latest data available from the CBR, slightly down from the recent high of $528.4bn set a week earlier in mid-August.
Russia’s central bank has been accumulating hard currency all year thanks to higher than expected oil prices this year and a budget that is flush with tax revenues and international investment into the domestic bond market.
World central banks acquired a record 374.1 tons of gold in the first half of 2019, the World Gold Council (WGC) reported on July 31.Global demand for gold increased by 8% to 1,123 tons in the second quarter, and in the first half of the year it reached 2,181.7 tons, the maximum in three years, according to the WGC. This was largely due to the demand from emerging market central banks, which accounted for a sixth of the demand. They spent a record $15.7bn to buy gold in the first half, the Financial Times said.
In the first half of the year, Russia acquired 94 tons of gold (a year earlier - 105.3 tons), according to the WGC. In the first quarter, it was the leader, but in the second quarter Poland overtook it, which immediately acquired 100 tons (Russia — 38.7 tons). The Central Bank of Poland called the purchase a strategic one with the goal of strengthening the country's financial security.
As of the end of June, gold reserves in the Russian central bank amounted to 2,207 tons, or 19% of foreign exchange reserves, the WGC reported. The accumulation of gold comes amid a sharp reduction in the share of dollars last year after the introduction in April of sanctions against the companies of Oleg Deripaska and Viktor Vekselberg. According to the US Treasury Department, in May 2019, the Bank of Russia held US $12bn in US Treasury bonds, while by April 2018, it had about $100bn.
Due to the growing demand of central banks, gold prices in June exceeded $1,400 per troy ounce for the first time since 2013. Investors' expectations that central banks will soften monetary policy and geopolitical risks associated with Iran, Brexit and the US and Chinese trade war contribute to growth. “June was an outstanding month in the gold market,” said Alister Hewitt, market analyst at WGC. “The key factor was the readiness of the US Federal Reserve to ease monetary policy, but it was also due to high demand in the first half of the year, which reached a three-year maximum due to purchases of central banks.”
53 RUSSIA Country Report September 2019 www.intellinews.com