Russia transfers R7.65 billion worth gold to central bank
December 21, 2009

Russia's Finance Ministry has sold 30 metric tons of gold to the country's Central Bank for $1 billion (R7.65 billion), an official said Monday, saying the cash will be use to help ease the crisis in the country's budget.

The cash slightly reduces Russia's deficit - reportedly around 7.3 percent of gross domestic product this year. The Central Bank is the only government body mandated to engage in foreign commodity and currency trade.

The deal marks the first large sale of gold from Russian coffers since the collapse of the Soviet Union. Russia is weathering its worst financial crisis in a decade.

Russia's finance minister said in October that Moscow was considering a gold sale on world markets to cash in on high prices as the government faces its first budget deficit in a decade.

A Finance Ministry spokesman said the deal was struck last week.

The spokesman, who declined to be identified because he was unauthorized to comment on the deal, would not say what the Central Bank planned to do with the gold, but Finance Minister Alexei Kudrin said in October that Moscow was considering selling gold on world markets to cash in on high prices and further replenish the budget.

Bank representatives said they were unaware of the deal.

Russia's gold and foreign currency reserves - the world's third-largest -stood at $443.7 billion as of December 11, according to the Central Bank. The gold reserves stood at some 613 metric tons as of December 1 worth $23 billion.

The Russian government - also a major holder of US dollars - has spoken strongly in favor of diversifying its reserves, but has so far done little to follow through. - Sapa-AP