If you are a developing country and your partners are trading and growing economically with the help of United States of America, then what will be the step you will take? Well, it is simple, you buy as much gold as possible.
Well, at least Kyrgyzstan’s central bank is doing exactly the same thing. They are following this technique in a bid in order to protect itself from the Russia and China currency violation. The main aim of this central Asian nation is to grow the shares of gold for around $2 billion international that will reverse around 50 per cent from around 16 per cent now.
Kyrgyz central bank Governor Tolkunbek Abdygulov, 42, said in an interview “The rules of the game are changing," "It doesn't matter what currencies we have in our reserves; dollars, yuan or rubles all make us vulnerable."
In 2015, Kyrgyz faced a hard time when the currency falls off at the lower price during Russia’s currency crisis that standoff with the West. The mountainous nations are not ready to risk itself with the total population of 6 million people between the two biggest economic countries. It depends heavily on Russia and China for the import work and on Moscow for the remittance from the army of the migrant workers that work there.
This policy of holding of the gold by Kyrgyzstan is as a percentage of the total reservation that is held by Russia and the emerging-market economic countries like Turkey and India. The Germany and US hold approximately 70 per cent of the total gold in the reserves.
For the stock build up, Kyrgyzstan is well-placed with the biggest export of the one of the most precious metal. In 2014, the main aim of the country is to buy as much gold as possible to improve the health and status of the country. The biggest mine of Kyrgyzstan is operated in Canada’s Centerra with the production that is sold outside the country. The total output of the industry is around $3.4 billion as reported in 2017.
"If we decide to sell gold, then we can easily sell it and convert into the currency we need," "Taking into consideration that we mine a lot of gold in our country, it's God-given that we should keep a large part of our reserves in gold," Abdygulov said.