Russia to Raise Gold Share in Reserves

This is not a major development, rather just another small step in a clear trend of governments buying gold.  Just imagine how much gold is going to be demanded if all this really hits the fan!  Right now, everything is supposedly still "recovering".

Russia to Raise Gold Share in Reserves, Eyes Adding Yuan, Ulyukayev Says  

By Maria Levitov - Jan 20, 2011 11:45 AM CT 

Russia’s central bank will raise the share of gold in its international reserves, the world’s third largest, from about 8 percent, First Deputy Central Bank Chairman Alexei Ulyukayev said. 

"We’ve increased our investment in gold during the last several years and we will continue to move in the same direction in the future," he said in an interview in London. "Gold is a natural part of reserves." 

Russia, which aims to diversify its reserves, started adding the Canadian dollar and plans to invest in the Australian dollar. The central bank has almost doubled the share of gold in the past three or four years, according to Ulyukayev. The stockpile comprises 47 percent U.S. dollars, 41 percent euros, 9 percent British pounds, 2 percent Japanese yen and 1 percent Canadian dollars, according to the central bank. 

The bank won’t begin to add the Australian dollar until the middle of the year, Ulyukayev said on Dec. 1. Policy makers may also add new currencies to the reserves, with the Chinese yuan a potential target once it becomes fully convertible. 

"We are trying our best to diversify the reserves" and investing in managed currencies is difficult, Ulyukayev said today. "If the capital control regime will be changed, in the People’s Republic of China in this case, we can invest in that currency also." 

To contact the reporter on this story: Maria Levitov in Moscow at mlevitov@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net 

Source: Bloomberg