Russia will keep its gold at home


From RIA Novosti, Moscow
Thursday, November 19, 2009

MOSCOW -- Russia's Central Bank said on Thursday it is ready to buy 30 metric tons (965,000 troy ounces) of gold at market prices from the country's precious metals depositary, Gokhran, by the end of the year.

Central Bank First Deputy Chairman Alexei Ulyukayev said the means of payment for the gold will depend on the requirements of the Finance Ministry and will probably be denominated in rubles.

Ulyukayev played down fears that the timing of the purchase could prove unfavorable given the current high price of gold, currently over $1,000 per troy ounce on global markets.

"They are at the peak levels relative to the previous period, but predictions of price dynamics vary," he said.

The Central Bank's announcement to buy up gold comes amid increasing international assets held by the bank, which grew by $7.8 billion in the week of November 6-13 to $441.7 billion. The cash paid for the gold will be used by the Finance Ministry to cover next year's state budget deficit, predicted at 6.8% of GDP.

This year Russia is running a deficit of 7.7% of GDP.

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