Ukraine’s gold reserves contracted to the smallest in six years as Russia bought bullion, taking its holdings to the biggest in at least two decades.
Ukraine reduced bullion reserves by about 35 percent to 26.1 metric tons last month, data on the International Monetary Fund’s website showed. Russia raised holdings by 1.6 percent to 1,168.7 tons by the end of October.
Ukraine’s holdings of foreign currencies and gold are shrinking as the fighting in Donetsk and Luhansk slows the economy and weakens the hryvnia. The country, which added about 14.9 tons of gold in the two years through April, sold the metal last month when prices approached a four-year low.
“It’s a country needing some cash,” Brian Lucey, a finance professor at Trinity College Dublin and former economist for the Central Bank of Ireland, said today by phone. “They’ve been adding gold over the years. It would make sense to move it off their books and get some money for it.”
The 14.3-ton sale last month, valued at about $562.6 million based on October’s average price, took holdings to the lowest since February 2008.
Bullion for immediate delivery lost 0.3 percent this year to $1,198.45 an ounce in London, according to Bloomberg generic pricing. Prices, which averaged $1,223.10 in October, touched a four-year low of $1,132.16 on Nov. 7.