After taking a breather from gold-buying in December, the Central Bank of the Russian Federation jumped back into the gold market with both feet in January.
The Russian media outlet Sputnik cited a report from Vesti.ru this week that in January Russia expanded is gold reserves by 37 tonnes, equivalent to more than one million troy ounces. That contributed to a growth of 4% in Russia’s overall foreign exchange reserves to $393.6 billion.
Russia bought no gold in December, taking a pause from an aggressive buying pace that saw the central bank acquire 31 tonnes in November and 48 tonnes in October, the largest one-month purchase since 1998.
For all of last year, Russia bought about 200 tonnes of gold (6.4 million troy ounces). The year before, the bank added 206 tonnes.
Anton Navoi, deputy head of the central bank’s department of statistics, revealed at a Thomson Reuters conference in September that gold comprises 16% of Russia’s foreign currency reserves. He said Russia has no specific target goal for the gold content of its reserves.
“The bank is buying gold because it’s advantageous. Our country is third in the world in terms of gold production, and we have the opportunity to buy it in our national currency, in contrast to other countries that don’t have such an opportunity,” Navoi explained.
The Russian bank ranks as the sixth largest holder of gold in the world and the third largest producer of gold behind China and Australia.
Central banks have been net purchases of gold ever since the 2008 financial crisis, adding more than 2,800 tonnes to their vaults. Last year, central bank purchases totaled 383.6 tonnes of gold. About 80% of that total was bought by Russia, China, and Kazakhstan.