Bank of Russia suspends gold purchases from credit institutions

The Bank of Russia announced Tuesday it has suspended its gold purchases from credit institutions.

"Households' demand for the purchase of gold in physical form, bullions, has increased recently. This is in part facilitated by the cancellation of the VAT on these transactions," the Russian central bank said in a statement.

"To create conditions for meeting the households' demand, the Bank of Russia suspends its gold purchases from credit institutions starting from 15 March 2022," it added.

Amid war in Ukraine and sanctions against Moscow, Russia is largely cut off from the global financial markets.

Russian central bank reserves stood around $643 billion as of Feb. 18. While 21.7% of the reserves are in Russia as gold, 13.8% are held in China.

However, some portion of the reserves is still held in Western countries, mostly as foreign exchange. The central bank's access to them has been blocked by the Western sanctions.

Around 12.2% of Russia's foreign exchange reserves are in France and 10% in Japan, while 9.5% are held in Germany and 6.6% in the US.