Russia is increasing its gold reserves to keep its economy stable against political uncertainty, Dmitry Tulin, a senior official with the country’s Central Bank, said on Tuesday.
Data released by the Central Bank showed that as of May 1, Russia’s gold reserves jumped to 40.1 million troy ounces, as against the 39.8 million ounces, or 1,238 metric tons, a month before. In March, Russia’s gold holdings was at 38.8 million ounces.
Tulin admitted Moscow is expanding its reserves of the safe haven yellow metal gold because it is a sure hedge. “It is a 100 percent guarantee from legal and political risks.”
Reuters reports Tulin’s comments exposes Russian concerns that a further toughening of Western sanctions against the country over its participation in the Ukraine crisis could freeze its overseas assets.
Over the years, gold has indeed acted as a vital hedge and protected Russia’s reserves from the declining value of the rouble as well as the dropping value of the euro, portal ZeroHedge.com said in April. Gold accounts for 13 percent of Russia’s total foreign reserves, the World Gold Council said earlier.
As it increases its gold reserves, Russia has also been seen decreasing its holdings of other assets, primarily the U.S. Treasury bills.