Russia’s Central Bank (RZB) has announced that it will stop buying gold from banks so that they can meet the demand of the population, according to France Press, citing a communiqué from the bank.
“Currently, the demand from the population for the purchase of physical gold bars has increased, mainly due to the abolition of VAT on these transactions,” – said in a statement. The RBI resumed buying gold on the domestic bullion market on February 28, 2022, almost two years after suspending the operation. This happened after the Russian invasion of Ukraine.
Then came the abolition of VAT on the purchase of gold by private individuals, and meanwhile the ruble fell due to Western sanctions. This measure is aimed at ensuring that the population does not buy foreign currency, which in mass circulation further weakens the national currency.
Serious restrictions were imposed on the purchase, withdrawal and export of foreign currency. Since the beginning of the military intervention, the ruble has lost 40 percent of its value. Some of RKB’s foreign exchange reserves there were frozen by the West, which limited its ability to act.