National Bank of Kazakhstan Will Purchase Bigger Gold Reserves Compared to 2019

National Bank of Kazakhstan Will Purchase Bigger Gold Reserves Compared to 2019

Gold is one of the more acknowledged stores of value, both for financial institutions and regular investors. The National Bank of Kazakhstan currently plans to buy 60 tons of gold in 2020. 

Increasing the Gold Holdings

Most central banks around the world have relatively big reserves. Those reserves can come in many different forms, ranging from foreign currencies to precious metals such as gold, silver, and palladium. In Kazakhstan, the national bank mulls increasing its gold holdings over the coming year and a half.

As funds are transferred between the National Fund and the country’s budget, reserves need to be bought and sold accordingly. To guarantee a successful transfer, $462.5 million in gold was sold. That is a rather steep amount that will need to be recovered through other means.

Current foreign exchange interventions make their mark on the international reserves levels. Kazakhstan is still home to ample reserves, currently estimated at nearly $30 billion. This amount increased throughout March of 2020 by $550 million.

However, the foreign exchange reserves decreased by $104 million. It is not uncommon for these balances and levels to shift as the year progresses. Keeping enough funds on hand in case of an emergency will always be the number one priority. 

On the positive side, the National bank of Kazakhstan has increased the value of its gold portfolio by $658 million. Several factors contribute to this growth. First of all, there is a small increase in reserves purchased from local producers. Secondly, the price of gold increased by over $40 an ounce.

Speaking of increasing gold reserves, the National Bank acquired 3.6 tons of gold in February 2020. Of that amount, 1.9 tons were sold to the National Fund. All of these moves seem to confirm the worth and resilience of gold as a core financial asset. 

It is expected that the National Bank of Kazakhstan will continue to increase its gold reserves. Purchases will continue every single month and will eventually surpass 2019’s levels. Last year, 57 tons of gold were purchased, but experts predict roughly 60 tons will be added in 2020.