National Bank to double the share of gold in gold and currency reserves 22 октября 2011, 12:40
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Gregory Marchenko. ©Vladimir Dmitriyev
Kazakhstan’s National Bank will double its share of gold in its gold and currency reserves through exercising its pre-emtive right to purchase all gold produced within the country; however, with the estimated growth of gold and currency reserves for the period the share of gold will only grow from the current 12.4% to 15%, Central Bank Governor Gregory Marchenko said in an interview for Prime.ru .
In August the National Bank announced that to refill the nation’s gold reserves the Bank plans to exercise its preemptive right to purchase all the refined gold in bullions.
“With the current level of gold production we can easily purchase all the gold to be produced within 2-3 years. Should we decide we have enough gold, we will suggest changing the set order”, Marchenko said at the time.
He elaborated that in the latter case the National Bank could purchase part of produced gold, enabling producers to export the rest amount.
“Alternatively, we could sell part of gold out of the Bank’s portfolio at the external markets, which would be even easier, given that over half of gold (out of the National Bank’s reserves) is kept outside Kazakhstan”, Marchenko said.
When commenting on the reasons behind the Bank’s decision to exercise its preemptive right to purchase Kazakhstan-produced gold, Mr. Marchenko pointed to lack of transparency in gold exports following the liberalization of the national market of precious metals.
“The share of gold in the gold and currency reserves is 12.4%. If we double it within 2 years, with the projected growth of the reserves, the share will rise to 15% … Not a single gram of gold has been sold to the Bank for the last 6 years. To mint gold coins – both for collection and investments purposes – we have had to purchase gold from abroad”, Marchenko said in his Prime.ru interview.
As of September 1, the Bank’s gold assets are worth $3.95 billion, 29.5% up from the start of the year.
Tengrinews.kz reported earlier that gold production output in Kazakhstan in January – July grew 48.3% as compared to the like period of 2010, the State Agency for Statistics reports.
According to the stats, production of raw and semi-refined gold for the period made up 21 432 tons. Refined gold production figure stood at 9.71 tons.
In 2010 annual production of raw gold and semi-processed gold stood at 29.9 tons, with 13.3 tons being refined gold. The Kazakhstan’s Ministry of Industry and New technology seeks to bring gold production up to 70 tons a year.
July 4 President Nazarbayev announced that Kazakhstan needs a state-owned gold refinery.
When it comes to domestic demand, the Kazakhs have been more interested in silver, according to Mr. Marchenko. “Silver coins were used instead of regular buttons on ladies’ wear (…) jewelries were also made of silver”.