As of the end of May this year, gross international reserves fell by 8.8% on-year and amounted to $28 billion. In the same period last year, the amount reached $30.7 billion, with an increase by 1.8% on-year. In comparison with the previous month, gold and foreign currency reserves increased in May by 3.5%, or by 947 million dollar.
The assets of the National Fund as of the end of May of the current year amounted to $58.7 billion, having decreased by 0.9% yoy. Over the month, a decrease by 1.1% was noted as a result of the allocation of guaranteed and targeted transfers to the budget.
According to Yerbolat Dosayev, from July 1, 2019, foreign currency deposits for banks in the National Bank will be introduced to form an incentive to preserve foreign currency assets within the country. The term of such deposits will be 1 month at a rate of 0.5% per annum.
Starting from the current year, gold accounted for the largest share in the structure of gold and foreign exchange reserves at $15.5 billion, with an annual growth by 15.7%. The share of gold increased over the year from 43.5% to 55.1%.
The National Bank of Kazakhstan began to buy gold since 2018. Note that this is a global trend. According to the World Gold Council, net purchases of gold by central banks reached 651.5 tonnes in 2018, which is 73.8% higher than the previous year. This is the highest level of annual net purchases since the suspension of the convertibility of the dollar into gold in 1971 and the second largest annual total in the organisation’s entire history.
The growing geopolitical and economic uncertainty throughout the year increasingly prompted central banks to diversify their reserves and refocus their attention on investing in safe and liquid assets. In 2018, Kazakhstan entered the TOP-3 leaders in the purchase of gold after Russia and Turkey.
Meanwhile, assets in foreign currency in Kazakhstan for the year decreased by 27.6% to $12.6 billion, while the share fell from 56.5% to 44.9%.
In the first quarter, net purchases of gold by central banks amounted to 145.5 tonnes, which is 67.8% more than in the previous year. This is the highest volume of net purchases in the first quarter since 2013 at 179.1 tonnes.
Russia again became the largest buyer, adding 55.3 tonnes of gold in the first quarter. Kazakhstan also continues to buy valuable metal: for example, 11.2 tonnes were purchased in the first quarter.
The World Gold Council has provided a ranking of countries in terms of gold in international reserves. As of June, the leaders are the United States at 8.1 thousand tonnes, Germany at 3.4 thousand tonnes, and Italy at 2.5 thousand tonnes. Also in the TOP-5 are France at 2.4 thousand tonnes, and Russia at 2.2 thousand tonnes.
Kazakhstan, in turn, took the 14th place in the ranking, the volume of gold amounted to 366.6 tonnes. In some countries of the TOP-10 in terms of volume, the share of gold in gold and foreign exchange reserves is much lower than in Kazakhstan.
Diversification, security and liquidity are priorities for central banks around the world. For many, gold has been an asset to best meet these needs.
Reported by Finprom (Kazakhstan).
