Gold participates with about 11 percent in the total foreign exchange reserves of Serbia

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Thanks to the purchase of gold in recent years, Serbia has managed to provide 31.26 tons of this precious metal and thus insure the domestic market from the excessive harmful impact of the current coronavirus pandemic on the economy in the country.
Belgrade Banking Academy professor Zoran Grubisic adds that gold has always been shown to be a good custodian of value in “turbulent” times, especially when the economic crisis lasts and when it is unpredictable how deep the consequences will be on one country.
Serbia has 31.26 tons of gold at its disposal, which is a 50 percent increase compared to the same period, while the total value of gold in the foreign exchange reserves of the National Bank of Serbia currently amounts to 1.58 billion euros, the National Bank of Serbia (NBS) told Tanjug.
“Gold is the best safe harbor or, if nothing else, a ‘hedging’ instrument, which protects against numerous risks and contributes to significant portfolio diversification, ie the total value of assets,” Grubisic explained to Tanjug.
During this year, the average price of gold was about 1,627 euros per fine ounce, ranging from about 1,450 euros (mid-March) to 1,765 euros per ounce (mid-May), indicating that the price of gold increased in just two months is more than 20 percent.
At the beginning of October 2019, the National Bank of Serbia bought nine tons of gold of the highest quality on the international market, while since 2005, it has not sold gold. The average price at which gold was bought abroad in October last year was 1,503.16 euros per fine ounce.
According to the latest data, gold participates with about 11 percent in the total foreign exchange reserves of the state. By further increasing the amount of gold, the significant harmful impact of the current coronavirus pandemic on the financial system and economy of our country, the so-called the “black swan” effect, says Grubisic.
In the past few days, the price of gold was around 1,712 dollars per ounce, so the calculation shows that the growth of the price of “yellow metal” of about 14 percent also contributed to the growth of the value of our country’s foreign exchange reserves.
“Thus, we have once again shown that we think and act proactively, that is, that we prepare in time, in favorable and relatively peaceful periods, for a possible upcoming uncertainty, which unfortunately happened this year,” they say in the NBS.
According to Grubisic, gold reserves are important for every potential investor because, as a rule, investors first look at the macroeconomic picture of the country, stability, sustainability, and long-term economic policy.
The indicator of stability is, apart from foreign exchange reserves, low inflation, a stable exchange rate, and the total amount of domestic currency in circulation, and the number of months of imports covered by foreign exchange reserves, and in our country it is about seven months, says Grubisic, Tanjug reports.