Russia may have the 4th largest foreign exchange reserves in the world

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MOSCOW – Russia may soon take Saudi Arabia’s fourth place in foreign exchange reserves, reports Bloomberg.

Applying a policy of freeing up dollar-denominated assets due to US sanctions, Russia is expected to replace Saudi Arabia in fourth position with the world’s fourth largest reserve of money, gold and other securities, the agency said.

According to a publication, Russia is strictly limiting the budget, maintaining its surplus, while Saudi Arabia continues to spend money in social areas.

Central Bank of Russia indicates that the foreign exchange reserves of the country totaled about $518 billion on August 1. And the amount of money has only grown significantly over the past four years and is projected by Fitch Ratings at $537 billion by the end of 2019, and $591 billion by 2021.

Larger Reservations

The top three countries with the largest foreign exchange reserves are China, Japan and Switzerland. The price of gold itself rose last month, breaking a record $1,400 per ounce for the first time since 2013.

Factors behind this were lower interest rate expectations and political uncertainty due to a recent escalation in the US-China trade war, according to a World Gold Council (WGC) report.

Note that the foreign exchange reserves consist of currency, monetary gold and special drawing rights, which are under state control.

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Meanwhile, despite efforts to reach agreement and end the trade war, Beijing and Washington are increasingly bogged down in economic struggles.

A few days ago, US President Donald Trump announced his intention to impose new tariffs on Chinese goods valued at $300 billion.

This decision comes shortly after the US president blamed China for manipulating its currency .

Beijing has been buying gold for eight consecutive months, having added 10 tons of the precious metal to their only reverse over the past month, according to reports Bloomberg.

China has purchased 94 tons of gold bullion, considered a safe investment asset.

According to the People’s Bank of China, the country’s precious metal reserves amount to about 1,945 tonnes, equivalent to about $90 billion at current prices of about $1,500 per ounce.

Meanwhile, the price of gold has peaked in the last 6 years due to the slowdown in the world economy, with central banks lowering interest rates.

As Societe Generale analysts point out, China has been buying gold regularly to diversify its reserves, move away from the US currency and protect itself against the risks of trade war .

from https://www.fort-russ.com/2019/08/russia-may-have-the-4th-largest-foreign-exchange-reserves-in-the-world/

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