Russian citizens purchased over 50 tonnes of gold bars in 2022, which is ten times more than the year before.
According to data published on Friday by the Russian Ministry of Finance, the Russians have been buying record amounts of gold bars in 2022 as part of its strategy to diversify its foreign reserves away from the US dollar, By buying gold, the Russian government is able to protect its foreign reserves from the effects of US sanctions and other economic risks.
According to the data, most of the purchases were in 1 kilogram bars, which composed 60 per cent of sales.
The figures were not final and only cover the period ending November 2022, according to the Russian finance ministry. Meanwhile, state-controlled VTB Bank indicated it sold 33.8 tonnes of gold bars to customers in 2022. At present, its clients hold 50 billion roubles (USD$711 million) worth of the precious metal.
Moscow eliminated the 20 per cent value-added tax (VAT) on physical gold trades for individuals last March to pull people away from using the United States dollar as a safe haven asset, according to data from the Russian ministry of finance published on Friday.
The Russian government also offered an exemption from paying income tax on profits gained through the sale of gold. This consequently added to the demand for the metal.