Russia’s foreign currency reserves increased by 0.7% in the week ending December 24, hitting $630.5 billion in total.
As per the regulator, the weekly increase in the country’s overseas reserves was $4.2 billion in monetary terms. A planned purchase of foreign currency, along with a favorable market re-evaluation, is said to have triggered the spike.
The reserves hit a new high of $626.3 billion in the last month, representing a weekly increase of $4.1 billion, according to the most recent figures from the Russian Central Bank.
The Central Bank of Russia and the government have access to Russia’s international reserves, which are highly liquid foreign assets consisting of monetary gold, foreign currencies, and special drawing rights, notably Russia has the fifth-largest foreign exchange reserves in the world.
Russia keeps stockpiling gold and foreign currencies
After the Russian government was forced to spend over $250 billion to bail out the economy amid the 2014 oil price crisis, their reserves plummeted to their lowest level since 2008.
However, Russian gold and foreign currency reserves have almost doubled in the intervening period. Holdings have surpassed the $500 billion target level established by the regulator in June 2019 and have stayed over that level ever since then.
Despite the negative effect of the coronavirus pandemic on the economy, which compelled the government to raise expenditures to help firms and individuals, the holdings increased by 7.5% to $595.8 billion in 2020.
Gold holdings hit 31-year high in 2021
In order to boost their foreign currency reserves, central banks around the globe are boosting their gold holdings which have seemingly brought the total to a 31-year high in 2021.
International research group of the gold industry, the World Gold Council, claims that central banks have amassed 4,500 tons of gold in the last decade alone. At the end of September, the reserves amounted to almost 36,000 tons, the highest level since 1990 and a 15% increase over a decade earlier.
Despite the fact that the Federal Reserve of the United States is beginning to tighten its control on lending, other central banks are continuing their transition away from the dollar in response to global worries about the dollar-based monetary framework.
The purchasing of gold by emerging market countries is an example of this; Thailand purchased 90 tons in the first nine months of 2021, in addition to India with 70 tons and Brazil with 60 tons.