Russia's gold & currency reserves hit record highs as Moscow warns of ‘unprecedented pressures’ from inflation on world economy

Russia's international reserves have reached historic levels, with the country investing in assets like gold and foreign currency amid growing economic uncertainty with inflation spiking steeply after a global borrowing spree.

On Thursday, Moscow’s Accounts Chamber revealed that the nation has more overseas assets on hand than ever before. “The volume of Russia’s international reserves now exceeds 61 billion US dollars,” a statement from officials reads. “This is a historic record. No such figure has been achieved before in the whole existence of the Bank of Russia.”

“At present,” the analysis went on, “Russia ranks fifth in the world for the size of its international reserves. Only China, Japan, Switzerland and India are ahead.” Moscow has stepped up the share of gold in its portfolio in recent years, from 7.8% of overall assets in 2014 to 23.3% at the end of 2020.

The news coincides with a warning from the country’s finance minister, who said on Thursday that there is a risk the world could hit a spiral of ‘stagflation’, with rising prices worsened by an economic slowdown. According to him, “inflation is running above target in 14 of the G20 countries already and in many developed nations the scale of inflationary pressure is unprecedented.”

Last month, President Vladimir Putin announced that Russia’s economy has now entirely recovered from the disruption caused by the Covid-19 pandemic. “Based on the results of the seven months of this year, the gross domestic product has reached the pre-crisis level. The decline that was caused by the pandemic has been fully overcome,” he said.

“In the post-crisis phase, it is necessary to form a model of sustainable economic development, which could fully cover all the industries and regions of Russia… And, of course, economic growth is the key to successful implementation of state plans and projects, and achievement of national development goals,” Putin added.

The president has previously warned that while Russia appears to have faced less economic disruption as a result of the pandemic, not all countries are recovering as quickly as others, calling for support for developing nations.

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