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The Telegraph reported that Russia is back at gold stockpiling after suspending purchases for the first two months of 2015. The move is reportedly connected to the fact that the country’s central bank is set to cut its main interest rate by 200 basis points when it convenes Thursday.
The Telegraph reported that Russia is back at gold stockpiling after suspending purchases for the first two months of 2015. The move is reportedly connected to the fact that the country’s central bank is set to cut its main interest rate by 200 basis points when it convenes Thursday.
As quoted in the market news:
The bank had been forced to raise rates to 17pc last December at the height of the rouble crisis following the collapse in oil prices and the imposition of tough economic sanctions by the US and Europe.
According to the International Monetary Fund, the Kremlin in March bought gold in the largest quantities seen since last September, when president Vladimir Putin’s dispute with the West over Ukraine was beginning to heat up, leading to the near collapse of the rouble against the US dollar.
The currency has appreciated by around 27pc against the dollar since January, which may have prompted the decision to resume gold purchases.
Per Hammarlund, chief emerging markets strategist at Nordic bank SEB, told the news outlet:
The conditions that required the exceptional rate are no longer there. In addition, the central bank needs to stem the appreciation of the rouble as it eats into government revenue from oil.
