Kazakhstan’s central bank said on Wednesday it would be buying up the Central Asian nation’s entire gold bullion output until at least 2014-15 to ease its exposure to the sagging dollar.
The bank decided last month that it would start buying up the entire gold bullion output from domestic producers on Jan. 1, 2012 to augment its gold reserves.
“In the next two or three years we will certainly be buying up the entire (gold output) volume,” National Bank Governor Grigory Marchenko told a news conference.
He did not exclude the possibility that gold producers and the central bank could start exporting gold after that period.
Kazakhstan’s central bank has joined central banks of other emerging economies in stocking up gold reserves amid concerns fuelled by the ailing dollar and waning confidence in the resilience of the global economy.
Spot gold dropped 2 percent on Wednesday to as low as $1,826 an ounce, nearly $100 off the all-time high above $1,920 hit in the previous session, tracking heavy losses on U.S. gold futures on technical selling.
The gold assets of Kazakhstan’s central bank have grown by 29.5 percent since the end of last year to stand at $4.0 billion as of August 31, amounting to 11.1 percent of the country’s net gold and foreign currency reserves.
Kazakhstan, Central Asia’s largest economy and oil producer, produced 21.4 tonnes of gold, including 9.7 tonnes of refined gold, in January-July of this year. It plans to boost gold output to 33 tonnes this year from 20 tonnes in 2010.
Kazzinc, controlled by Glencore, is currently the only domestic producer of ingots that meet international standards.