Tavex: Hungary’s gold reserve tops that of Romania for the first time in history after 14.5 ton acquisition
Tue Nov 19 2024
For the first time in modern history, Hungary holds more gold reserves than Romania after the National Bank of Hungary purchased 14.5 tons of gold at the end of September this year, according to Tavex Romania.
The price of gold gold has increased by 25% this year alone and reached an all-time high of USD 2,790 in October, but the trend has reversed since the election of Donald Trump, which brought new highs on the stock and crypto markets.
Many central banks, including those of Poland, Turkey, Serbia, China, India, and Singapore, increased their gold reserves over the past three years.
According to data from the National Bank of Romania (NBR), the official gold holdings of the country amount to 103.6 tons. Of this, about 61 tons (or 59%) are held in the vaults of the Bank of England. With this quantity, Romania ranks 39th globally in terms of international gold reserves and sixth in the Eastern European region.
The most common reasons for central banks to hold international reserves are: to provide a fund in case of emergencies, to use the assets for the implementation of monetary policy, but also to use these reserves as an anchor for the value of the currency issued by the central bank, according to experts at Tavex, the largest investment gold trader in Northern Europe and a major player in the Romanian and South-Eastern European market.
Gold makes up 12% of Romania’s international reserve portfolio. Since the introduction of the new Romanian leu in 2005, this value has fluctuated constantly between 6.24% and 14.14%. Despite these variations, actual gold holdings have changed very little in quantitative terms. The main reason for the fluctuations, then, was the change of prices in gold and other assets.
“The International Monetary Fund recommendations suggest that gold should represent about 10% of a country’s total international reserves. There are deviations ranging from 0% (as in Canada, Norway, or Croatia, which hold no gold) to 75% (countries like Uzbekistan, Portugal, the USA, and Germany). In line with these recommendations, the National Bank of Romania maintains this ratio,” said Victor Dima, Manager of the Treasury Department of Tavex Romania.
The National Bank of Romania did not consider it necessary to expand its gold holdings, the last purchase being made in 2002. The bank’s declared aim is to keep the exchange rate between the leu and the euro stable.
Source: https://www.romania-insider.com