Server sync... Block time in database: 1626896760, server time: 1627065375, offset: 168615

Russia reduces buying gold, and the yuan fills the dollar vacancy


The latest news on July 3, Beijing time, the Russian central bank governor Nabiulina said that the Russian central bank has been buying gold at a price lower than the industry benchmark price, in order to encourage Russian gold producers to export gold.

As we all know, gold has always been a “safe haven asset” in the eyes of investors. Since Russia has been affected by Western restrictions and the global turmoil, the Russian central bank’s gold holdings reached a record high in 2018, surpassing China’s fifth place among the world’s official institutions. However, as the Russian central bank lowers the purchase price, the monthly gold purchase is also gradually decreasing.

The data shows that as of June 1, Russia's gold reserves were 70.4 million ounces, up only 200,000 ounces from last month. Compared to other currencies, the Russian central bank seems to think that it has bought enough gold. Nabirina said that in the current environment, Russia needs a diversified foreign exchange reserve structure. In fact, Russia began to reduce the amount of gold bought is the right choice. Now that gold prices have soared to their highest level since 2013, continuing to buy seems to push up costs. Since the end of September 2017, the Russian central bank has successfully reduced the share of US dollar assets in its reserves by more than half, and filled the reduced share with the euro and the yuan. Some analysts pointed out that such a reserve structure as Russia may be referenced by more and more countries.

In addition to the reduction in buying gold, the Russian central bank seems to have to follow the major central banks to start cutting interest rates. According to market sources, the Russian central bank plans to cut interest rates at a small pace and complete the easing cycle in mid-2020. The Russian central bank revealed that if the Russian government began to use the national wealth fund, the ruble may stabilize. It seems that Russia’s strategic move to get rid of the dollar may soon be successful.


Comments 0