Bullion Desk

Russian central bank buys another 15.5t of gold in October, becomes 8th-largest holder

November 20th, 2008

By: Clara Denina

Russia continued to add to its gold reserves in October, with total holdings rising a further 500,000 ounces or 15.5 tonnes to 19.5 million ounces over the month, data from the central bank website showed on Friday.

The country has been very active in increasing its holdings in the past two years, with a 69-tonne addition in 2008 and an increase of more than 90 tonnes so far in 2009.

After replacing the European Central Bank as the tenth-largest gold holder in May, it now appears to have surpassed the Netherlands at 658.40 tonnes, just after Japan.

The country is also the world’s sixth-largest gold producer.

"It would be appropriate to hold 10 percent of reserves in gold," the Central Bank of Russia (CBR) said back in November 2005. This would imply holdings of 1,200-1,300 tonnes of gold at current prices and foreign exchange reserve levels.

Central banks in developing nations such as Russia and China but also smaller countries such as Mauritius and Sri Lanka have announced that they will raise their gold allocations as they diversify away from the dollar to cut currency risk.

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