The Bank of Russia announced on Wednesday that it has, for the first time, begun selling physical gold from its reserves as part of operations conducted by the Finance Ministry to fund the state budget.
This action reflects previous transactions involving gold from the National Wealth Fund (NWF), which had largely been virtual until now. In those earlier operations, the government sold gold to the Central Bank, but the bullion physically remained within the country’s central reserves.
Russia possesses the world's fifth-largest gold reserves, exceeding 2,300 tons.
A Central Bank spokesperson informed Interfax that, "With domestic gold market liquidity having increased in recent years, the Bank of Russia now conducts equivalent operations on the domestic market not only through yuan transactions but also partially through gold."
The Bank did not disclose the specific timing or size of these recent physical gold sales.
The NWF held 405.7 tons of gold before the full-scale invasion of Ukraine. Since then, the Finance Ministry has sold 57%—or 232.6 tons—to cover budget shortfalls, leaving the fund with 173.1 tons as of November 1.
Overall, the NWF’s liquid assets, including gold and yuan, have dropped by 55% to $51.6 billion.
Economists suggest that these gold sales assist the Central Bank in injecting currency into the market to support the Ruble, simultaneously easing pressure on its Yuan holdings.
"Using gold spreads pressure across markets and maintains reserve diversification," commented Vladimir Chernov, an analyst at Freedom Finance Global.
Possible Alternative Titles:
Russia Taps Physical Gold Reserves to Cover Budget Deficit
Central Bank of Russia Uses Physical Gold Sales to Stabilize Ruble and Diversify Currency Injections
Moscow Shifts from Virtual to Physical Gold Sales to Fund Budget Gaps
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