Russia's central bank to pay less for domestic gold from May

11th February 2019

By: Reuters

  

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MOSCOW – Russia's central bank will pay less than an industry benchmark for gold that it buys on the domestic market, it said on Monday.

The central bank said that from May 1 it would add a discount to a purchase price currently based on the daily London Bullion Market Association (LBMA) gold price. The size of the discount will gradually rise during 2019, it added.

Russia has overtaken China to become the world's fifth largest state holder of gold, with Western sanctions reducing its other investment options and helping to drive gold buying by its central bank to record highs in 2018.

The Russian central bank bought 8.8-million troy ounces last year. As of January 1 this year, it held 67.9-million ounces of gold, making it the world's fifth largest holder behind the United States, Germany, France and Italy.

The changes in the purchase policy are "in order to adjust the price conditions for the sale of gold to the Bank of Russia with the terms of its sale for export and other segments of the market, as well as the formation of pre-requisites for the further development of the domestic precious metals market," the central bank said in a statement.

Edited by Reuters

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