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22 Jan, 2019 14:40

Let’s replace US dollar with Russian gold, Moscow exchange chief suggests

Let’s replace US dollar with Russian gold, Moscow exchange chief suggests

Russian gold could become the perfect alternative to conservative investments in the greenback, the CEO of Russia’s key trading floor, Moscow Exchange (MOEX), believes.

“Let’s offer an alternative to the US dollar in the form of Russian gold, which we produce… investment gold,” CEO Alexander Afanasiev suggested, speaking in the Lower House of Russia’s parliament on Monday.

He added that some “super-conservative investors” purchase dollars and keep them “under the pillow,” which is not very safe, he believes.

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The MOEX chief also noted that Russians have increased their investment activity and act “surprisingly rational.”

Russia is the world’s third-largest gold producer and in 2017 boosted its gold output by more than six percent. It produced almost 265 tons of gold in January-October 2018, according to data provided by the Finance Ministry.

However, some analysts doubted Afanasiev’s idea, warning that using the precious metal instead of the US dollar might be simply inconvenient.

“Gold does not have liquidity of the dollar. As practice shows, settlements in it are inconvenient for individuals,” metals and mining director Nikolai Sosnovsky from Prosperity Capital Management told TASS on Tuesday.

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He explained that Russia has no “normal” financial instruments for investments in precious metals, including unfavorable conditions for metal accounts and VAT for physical gold.

Last week, Russia outpaced China and became the fifth largest gold holder in the world. The Central Bank of Russia reported that it purchased 8.8 million troy ounces of gold in January-November 2018, boosting gold reserves to almost 68 million troy ounces (2,125 tons).

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