MOSCOW, June 26: Russia's central bank may use some of its palladium reserves for loan collateral rather than direct sales this year, a senior bank official was quoted as saying. But he added that although the bank intended to move some of its reserves onto the market, there would be no market collapse."The central bank may use its palladium as a collateral to attract foreign credits, rather than selling it directly to the market," Sergei Kyshtymov, deputy managing director of the bank's international monetary department told Interfax.
"Our position is that it is necessary to guarantee stable supplies of precious metals, palladium included, to the market," he added. Russian newspaper Izvestia, in its edition of June 26, quoted anonymous sources as saying there was every reason to believe the central bank was preparing to dispose of its palladium reserves.
It also said Russia needed an open policy regarding palladium which could permit it sign long term contracts. "It will bring profits and will permitthe ousting of speculators, who juggle with our unpredictability," Izvestia said.
Russian newspaper Kommersant Daily said on Wednesday that the central bank had received permission in a secret presidential decree to sell 200 tonnes of palladium by the end of this year.
It added that the sales would be for collateral for a loan to support the rouble. And the paper also said the bank would bypass Almazjuvelirexport (Almaz), the sole precious metals export agency.
Almaz deputy general director Sergei Gorny told Reuters he had no information that the bank had been authorised to bypass Almaz.Russia is the world's largest producer of palladium, accounting for some 60 percent of global supply. Prices have been soaring this year following delays in delivering export supplies to markets.
Bureaucratic delays kept palladium off the market completely for the first few months of this year, and rumour and counter rumour over whether supplies were getting through have kept prices volatile recently. Meanwhile, thecentral bank has increased its gold reserves by 10 tonnes since the beginning of the year to about 525 tonnes.
Bank's deputy managing director at it international monetary department said, "the reserves are about 525 tonnes now and they are up by 10 tonnes." The central bank also reported that its overall foreign currency and gold reserves were equal to $15.7 billion, up from $14.6 billion on June 5. The price of gold used to evaluate the overall figure was $300 per troy ounce, Kyshtymov said.
Kyshtymov declined to disclose other precious and platinum group metals reserves at the central bank.
On Thursday, the central bank said that its foreign exchange and gold reserves on June 19 totalled $14.7 billion, down from $15.7 billion on June 12.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
