Russian gold and FX reserves hit a record level
(Kitco News) – Russia’s FX and gold reserves have been increasing in the last few years but it seems that inflationary woes mean the nation has been stocking up on the yellow metal again. The Russian central bank has been raising interest rates to try and combat the issue but stagflation seems to still be on the cards. This now means that the Russians are hedging against this problem by increasing the amount of gold it holds.
The central bank raised its share of gold in its international reserves to 23.3% in December 2020. This is up from 7.8% at the beginning of 2014 according to the country’s Accounts Chamber. This is said to be a historic record and no such figure has been achieved before in the whole existence of the Bank of Russia in terms of its international reserves (FX included).
The latest figures come as Russia’s finance minister on Thursday warned that the world risks succumbing to an unprecedented period of stagflation, as prices continue to rise rapidly while economic output slows. “Inflation is running above target in 14 of the G20 countries already and in many developed nations the scale of inflationary pressure is unprecedented,” he said, as quoted by RT News.
In addition to this, to try and decrease energy costs the nation is even offering to help Europe with supply. Deputy Prime Minister Novak said, “Despite record-high gas consumption in Russia and his intention to refill its own gas storage reserves before it increases supplies to Europe, he would increase supplies to Europe should it be requested.”. It seems Russia is willing to cooperate to reduce inflation around the globe.
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