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The Russia Ruble is now gold-backed
- david927 5y agotranslation Information on the purchase of gold by the Bank of Russia on the domestic market In order to balance supply and demand in the domestic precious metals market, the Bank of Russia will buy gold from credit institutions at a fixed price from March 28, 2022. The price from March 28 to June 30, 2022 inclusive will be 5,000 rubles per 1 gram. The established price level makes it possible to ensure a stable supply of gold and the smooth functioning of the gold mining industry in the current year. After the specified period, the purchase price of gold can be adjusted taking into account the emerging balance of supply and demand in the domestic market.
- Finnucane 5y agoDoes it say that they are going to sell gold at that price? If you can't exchange your rubles for gold at a fixed price, you can't really say the ruble is 'gold backed'. All you can say is the Bank is forcing miners to sell to them at a discount.
- david927 5y agoWell that's the spot price ~ $1980/troy ounce.
- Finnucane 5y agoIs it? At today's exchange rate, that's $52/gram, or about $1600/troy ounce.
- willmadden 5y agoUSD:RUB rate is 96.05 right now. Spot gold is 1,953.48 USD, or 187,631.75 RUB per oz. 28.3495 grams in an oz of gold. 6,618.52 RUB per gram of gold at current prices. They are fixing the price at 5,000 RUB per gram of gold, so they are valuing the Ruble at a 32.3% premium to the current market value of RUB in gold (this moment).
- Finnucane 5y agoTroy oz is 31 grams. But still, they are not going to trade the ruble at that rate. The arbitrage would be too great.
- willmadden 5y agoI'm not so sure. See what's going on in Argentina between the blue dollar (free market) and the official ARS rate. 100%+ difference between the pegged value and free market value.
- thebean11 5y agoThat's a great deal for the Bank of Russia. Even if the Ruble keeps tanking and gold skyrockets, they have locked in a price for a few months. This sounds less like "gold backed Ruble" and more like "nationalize the gold mining industry".
- Canada 5y agoSo, gold is currently trading at $62/gram, and the Bank of Russia will buy it at $52/gram.
- muzika 5y agoAll this article seems to say is that the Russian central bank is BUYING gold at a set price at rubles. If ruble is to be backed by gold it would mean that if someone owns rubles and want to sell them for gold, Russian government would SELL them gold at a certain price of rubles.
- Koshkin 5y agoEnglish version: https://cbr.ru/eng/press/pr/?id=35871 https://cbr.ru/eng/press/pr/?id=35871
- rurban 5y agobut they didn't say where the gold is parked. it is in London and Switzerland, not in Moskow! so it's not safe of sanctions at all.
- neo_spike 5y agoIsn't Russia a major producer of gold? Couldn't they use gold they mine to help them work around these sanctions?
- iLemming 5y agoPotentially, they may struggle to sell that gold later. Russian gold has specific composition - it's relatively not that difficult to identify its provenance. What's the point of hoarding treasure if you can't sell or exchange it?