Business
Author`s name Dmitry Sudakov

Russia buys more gold, intensifies activities in Asia to bury the US dollar

Russia's activity in the Asian region may undermine the world financial domination of the United States.

Russia has recently concluded major oil and gas contracts with leading Asian countries. According to the South China Morning Post, Russia's ambitious gas projects in the Far East may trigger a sharp decline in the volume of US oil and gas contracts with Tokyo and Beijing.

A change in the vector of Russia's interests may also threaten the US dollar, which may eventually find itself on the margins of international trade.

Russia currently develops the Power of Siberia natural gas project and develops natural gas infrastructure in the Far East, the construction of which gradually evolves into the construction of  an underwater gas pipeline to Japan.

Russia currently tends to use the national currency in payments for supplies of hydrocarbons to foreign counterparts. As a result, such transactions completely exclude the participation of the dollar.

Meanwhile, Russia's Central Bank continues to accumulate national reserves in gold, as if trying to outstrip China at this point. For example, in June-2017 the Central Bank of Russia acquired 9.1 tons of gold.

The Bank of Russia remains the world leader in increasing the share of gold in international reserves, having added another 100 tons for the first six months of the year. In 2015 and 2016, the Central Bank bought 206.7 and 200.7 tons of gold. Thus, in 2.5 years, Russia's gold reserves have grown to 1,700 tons. To catch up with China, Russia needs to additionally purchase 126.7 tons of gold.

According to experts, there are only three central banks in the world that can afford to continue purchasing gold. They are central banks of Turkey, Kazakhstan and Russia.

"For six months of 2017, three of them have acquired 200.7 tons of gold, while the net demand from all regulators of the world amounted to 174.3 tons. In other words, other banks sold a total of  26.4 tons of gold," analysts say.

In addition, in five or seven years, Russia, China and India will completely refuse from the use of the dollar and the euro in international settlements. Such a development may lead to the collapse of the Bretton Woods system of finance, which made the US dollar the world's largest currency since 1944.

Pravda.Ru

Read article on the Russian version of Pravda.Ru


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