Russia is going to increase its foreign exchange reserves

Over the past year, the Central Bank of Russia has been the main buyer of gold bullion, and this trend will continue for the near future. According to media reports, Elvira Nabiullina, the chairman of the central bank, said there are plans to increase foreign exchange reserves to $ 500 billion over the next few years from the current level of $ 357 billion.

“Under optimal conditions, reserves should be sufficient to cover significant capital outflows within two to three years,” she said. "The increase in stocks should be gradual and consistent with monetary policy goals, in particular, to reduce inflation to 4 percent in the medium term."

In 2014, the central bank sold nearly a quarter of its foreign exchange reserves to prop up the ruble, which hit record lows at the end of the year. The fall of the ruble last year came as a result of a significant drop in oil prices and harsh economic sanctions associated with the annexation of Crimea.

Even last year, the central bank, while selling part of its reserves, continued to accumulate gold bullion. However, it is not specified exactly how much gold will be bought in order to increase the country's total foreign exchange reserves by about $ 145 billion in the coming years. In a press briefing after the conference, Nabiullina said the central bank's procurement would be done smoothly and over an extended period, limiting market exposure. “We will act depending on the situation in the foreign exchange market, and the parameters of transactions may change,” she said.

In 2014, according to the World Gold Council (WGC), the Central Bank of Russia bought 173 tons of gold, and this trend continues this year. The WGC noted that as of May 1, 2015, Russia's gold reserves rose to 40.1 million troy ounces, up from 39.8 million troy ounces in the previous month. According to the World Gold Council, Russia's gold and foreign exchange reserves account for more than 13 percent of the country's total national foreign exchange reserves.