Russia’s ‘National Wealth Fund’ receives clearance to invest in gold

Moscow : The ‘National Wealth Fund’ (NWF), created from the Russian federal budget assets, has received a go-ahead to invest in gold. Russian Prime Minister, Mikhail Mishustin, issued the order to this effect. The NWF has been created to make up the budget deficit in case of an economic crisis and other related necessary measures. As per information received in January, the assets of the NWF fund amount to $184 billion.

The ordinance issued by Prime Minister Mishustin reads that ‘Financial reserves of the NWF can be allocated in the accounts of the Bank of Russia in the form of precious metals, gold in particular, which is traditionally seen as one of the defensive assets.’ The decision is said to have been taken to make more options available for investments in the fund and ensure the fund is secured. The proposal had been submitted last year.

In the last few years, Russian President Vladimir Putin has initiated some aggressive steps to reduce the use of the US dollar. The focus has been changed to gold as an important policy decision. Also, increased stress has been given to growing production and exports of gold and the gold reserves. The statistics have proved the success of the policy.

Russian gold reserves have reached 2,298 tonnes from 1,112 tonnes in 2014. The Russian foreign reserves have reached the valuation of $590 billion, and a staggering $130 billion of it is in the form of gold. Russia’s international reserves in gold are 22%. For the first time in history, the percentage of gold in Russian reserves has exceeded the US dollar value.

At the same time, Russia’s gold production and exports are increasing rapidly. Three Russian companies feature in the list of top 10 gold producing companies. In 2020, Russia produced 331 tonnes of gold and became the second-highest gold producing country. The ‘Institute of Geotechnologies’ has claimed that Russia will surpass China in gold production in the next decade to become the number one gold producer in the world.

Meanwhile, Russia has also increased the exports of gold. In the first quarter of this year, according to reports, Russia exported 51.8 tonnes of gold. It is a whopping 72% higher than that in the corresponding period last year. The United Kingdom has emerged as the biggest buyer of gold. Reports revealed the country purchased more than 21 tonnes of gold from Russia.