Russia Increases Gold Holdings For Third Consecutive Month
LONDON -- Russia increased its central bank gold holdings for the third month in a row in May, according to data released by the World Gold Council on Monday.
The report said Russia , which has the fifth-largest state reserves globally, held 1,250.9 tons of gold in its central bank vaults, compared with 1,246.6 tons in the previous month.
Analysts said the Russian central bank is making the most of low gold prices to diversify away from its heavy reliance on dollars as it looks to rebuild its foreign exchange reserves. The bank sold around $150 billion in foreign reserves last year as it sought to prop up the ruble, which slumped heavily as a result of Western sanctions imposed over its involvement in Ukraine , as well as the drop in global oil prices.
"[The Russian central bank] is using the opportunity of soft gold prices to increase the gold component of [its] reserves," said Vladimir Tikhomirov , chief economist at BCS Financial Group . About half the reserves are held in dollars while between 35% and 38% are held in euros, he said.
Simona Gambarini , a commodities economist at Capital Economics, said she expects a "massive" increase in Russia's gold holdings over the next two or three years, as it sets about diversifying its reserves. About 13% of Russia's reserves are held in gold at the moment, and this could rise to 18% over the period, she said.
Turkey , meanwhile, offloaded 6.5 tons of yellow metal month-on-month and its reserves stood at 506.5 tons, according to the WGC.
-Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
07-13-15 1227ET
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