Dollar beware: Serbia & Philippines join global gold hunt

Thursday, May 30, 2019
By Paul Martin
30 May, 2019

Two more nations, Serbia and the Philippines, have boosted their national gold reserves. They follow a global trend of other central banks accumulating bullion in a move seen as a shift away from the US dollar standard.

Belgrade will increase its gold reserves from 20 to 30 tons by the end of this year, according to Serbian media company Vecernje Novosti. It said the country plans to boost its holding to 50 tons by the end of 2020 as a safety measure. Statistics from the National Bank of Serbia show foreign exchange reserves are currently worth €11 billion.

The decision to beef up bullion reserves was reportedly made following this month’s meeting of Serbian President Aleksandar Vučić with an IMF delegation. The fund’s representatives told the president they’d approve of Belgrade’s gold-buying if it fits into Serbia’s strategy of increasing foreign exchange reserves.

Last Wednesday the Central Bank of the Philippines announced that a law has been passed exempting gold sales by small-scale miners to the bank from excise duties and income taxes. The move was explained as a way to boost the country’s foreign exchange reserves and to prevent smuggling.

According to Reuters, small miners have found a way to circumvent taxes introduced back in 2011 by selling gold on the black market. The law entitles them to sell all produced gold to the country’s central bank at world market prices. The Philippines’ gold reserves remained unchanged at roughly 198 tons in both the first quarter of 2019 and the fourth quarter of 2018. Gold accounted for nearly ten percent of the country’s gross international reserves of $83.96 billion at the end of April.

Countries across the globe have been stockpiling bullion in an attempt to diversify their foreign reserves away from the US dollar.

According to the World Gold Council (WGC) data, overall net buying by central banks has reached its highest level, in terms of first quarter net purchases, since 2013. Purchases surged by 68 percent year-on-year to 145.5 tons, the data showed.

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