RUSSIA'S GOLD RESERVES
Context: G7 nations have agreed on a ban on Russian gold imports in the latest round of sanctions over Russia's invasion of Ukraine
Gold is Russia's second-largest export industry after energy. The US claims Russia is using gold as a support to its currency as a way to circumvent the impact of sanctions
Swapping gold for a more liquid exchange that is not to subject to current sanctions
Only a few countries are implementing the gold ban, the move is largely symbolic, while another argument being this move will target Russia's ability to interact with the global financial system
The Gold reserves
Gold is Russia's second most lucrative export after energy and nearly 90% of the revenue comes from G7 countries
Cutting down $19 billion dollars which are coming from G7 countries will be a significant impact on Russia
Russia increased its gold purchase in 2014 after the US issued sanctions on the invasion of Crimea
Now Russia holds $100 to $140 billion in gold reserves in the central bank
Why ban gold imports?
High level of export receipts sustaining the country and sustaining the economy since sanctions were ratcheted up on February 24th
This ban results in penalties for people who come from countries that have agreed on a gold ban from Russia
The US and its allies moved to block financial transactions with Russia's Central Bank that involved gold
How can it hurt Russia?
It can directly hit Russian oligarchs and strike at the heart of Putin's war machine
The ban is yet another way to block off paths between the Russian economy and the broader global financial systems
