Kazakhstan’s National Bank suspends gold sales, awaiting price surge

The National Bank of Kazakhstan has not sold gold from its gold and foreign currency reserves since Feb. 19, according to Chair Timur Suleimenov, who spoke to the press after the regulator announced its decision to keep the base rate unchanged.

«We have been purchasing gold as usual. This year, local factories will produce 67 tons of gold. Since the beginning of the year, we’ve sold just eight tons. Excluding this amount, we plan to continue buying and storing gold. We’re in accumulation mode,» he said.

The National Bank chair also revealed that the regulator halted gold sales in anticipation of a potential price increase, as many investment banks have made such predictions.

Since 2011, the National Bank has been purchasing gold from local producers. The regulator sells part of this amount on external markets and keeps the rest in its gold and foreign currency reserves. In mid-January, the central bank decided to sell U.S. dollars earned from gold exports to support the national currency and withdraw tenge liquidity created through gold purchases from producers. The bank described this mechanism as «mirroring.»

«As for funds used in mirroring transactions, 60% of our reserves are in gold, while the remaining volume consists of highly liquid assets. These are sufficient to implement mirroring transactions,» Suleimenov emphasized.

In early April, the World Gold Council reported that the National Bank’s net gold sales reached eight tons in February. Along with Uzbekistan, which sold 12 tons, Kazakhstan ranks among the global leaders in this indicator. Many other central banks around the world preferred to acquire gold instead.