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Kazakh National Bank talks about increase of gold in its international reserves(Exclusive)

Finance Materials 15 May 2019 16:43 (UTC +04:00)

Baku, Azerbaijan, May 15

By Fakhri Vakilov - Trend:

National Bank of Kazakhstan realizes the priority right to purchase refined gold from domestic producers, a representative of the National Bank of Kazakhstan told Trend in an interview.

Since the implementation of the priority right in 2011, the bank purchased 247 tons of refined gold, said the source.

Recently Trend reported that in March 2019, share of gold in Kazakhstan’s international reserves was 55.5 percent.

The representative of the National Bank noted that the advantage of replenishing the country's reserves with gold reserves is portfolio diversification due to the weak correlation of the precious metal with the dynamics of the currency, debt and stock markets. Gold assets act as an alternative to foreign currencies and securities, while they have zero credit risk.

If necessary, this asset can be converted into a freely convertible currency. As a result, reserves in gold are assets that protect against geopolitical risks, changes in currencies and currency regimes on the world market.

The bank further said that the acquisition of gold under priority law contributes to the development of domestic production, gold mining and processing industries.

The accumulation of assets in gold in reserves of countries of the world may affect the fact that the monetary system will be less dependent on monetary policy in the US, that is, more resistant to external global shocks.

Answering Trend's question about the investment activity of Kazakhstan, the representative of the bank said that the attractiveness of foreign investors is confirmed by positive trends in the inflow of foreign investments.

Thus, according to the results of 2018, the gross inflow of direct investments into Kazakhstan from foreign direct investors amounted to $24.3 billion, having increased by 15.8 percent compared to the previous year.

Furthermore, the most investments were attracted in such sectors as crude oil and natural gas production, wholesale and retail trade, repair of automobiles and motorcycles, metallurgical industry and production of finished metal products, except machinery and equipment.

From the point of view of currency legislation, Kazakhstan remains committed to a liberal currency regime, and the National Bank, in turn, fully adheres and supports the preservation of the investment attractiveness of Kazakhstan for foreign investors.

The representative stressed that the priority task of the National Bank of Kazakhstan is to ensure price stability, which will create the necessary conditions for business activities of economic entities and thus contribute to economic growth in general and the demand of borrowed resources, in particular.

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