The Bank of Russia has amended its gold buying method due to the strengthening of the domestic currency and will now buy the precious metal at a “negotiated price,” the regulator said in a press release on Thursday.
- The policy becomes effective on Friday, April 8.
On March 25, the central bank said it would buy gold at a fixed price of 5,000 rubles ($52) a gram until June 30.
The fixed price was below the market value, with gold on the international market trading at roughly $62 per gram.
The measure was implemented to support Russia’s national currency, which dropped sharply after a number of Western countries, including the US and most of the EU, placed economic penalties on Moscow over its military operation in Ukraine.
- The exchange rate on March 25 was around 96 rubles per US dollar and 107 rubles per euro.
- However, the Russian currency has been strengthening over the past two weeks, after Moscow announced a new ruble payment mechanism for exports of natural gas in response to Western sanctions.
The currency jumped 20% this week alone, reaching a six-week high against major currencies on Thursday and trading at 75 rubles to the US dollar and 81 to the euro.