Russia bought more than 21 tonnes of gold in December

The central bank of Russia remains despite the major economic crisis in the country Buy gold. The latest Figures The central bank's gold holdings increased by 21.7 tonnes in December to a total of 1,415 tonnes. In doing so, Russia strengthens its sixth position in the global ranking of countries with the largest gold reserves.

Figures from the World Gold Council It turns out that Russia has added a record amount of more than 206 tonnes of gold to its reserves in the past year. That is more than in 2014, when the central bank also bought a lot of gold with 173 tonnes. When Russia started buying gold in 2006, the precious metal represented less than 4% of total reserves. By the end of 2015, this had already increased to more than 13% of the total reserves.

Russia already has more than 13% of its reserves in gold

Crisis in Russia

The fall in oil prices has plunged the Russia economy into a deep crisis. Inflation is high and the value of the ruble has more than halved against the dollar in a few years. To cushion the depreciation of the currency, Russia has already had to draw on a significant part of its foreign exchange reserves, but despite this, the central bank continues to add gold to its reserves. In fact, over the past two years, the country has even increased its purchases of gold.

Russia bought record amount of gold in 2015

Russia sold foreign exchange reserves and buys gold

Gold by market value

Since 2006, the Russian central bank has been valuing its gold holdings on a monthly basis according to the current Gold price. Before that, the precious metal was valued in the vault at a historically fixed rate of $300 per troy ounce. By valuing gold at market price, the central bank recognizes that the value of gold can fluctuate relative to the value of the ruble.

This is an important break with the past of the gold standard, in which central banks and governments tried to peg the price of gold to the currency. The ECB has been valuing the eurozone's gold reserves at market price since the introduction of the single currency. Since last year, the Chinese central bank has also been reporting its gold stocks to the monthly gold rate.

Gold stock Russia continues to grow

Central banks continue to buy gold

The central bank of Russia wants to further expand its gold reserves, because the precious metal is seen as a safe reserve without political risk. Gold has a disciplining effect in the financial system and is used by almost all central banks as a safety net in times of crisis. Since the outbreak of the financial crisis, central banks have become net buyers of gold in the global gold market.