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.
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