11 Mar 2022 14:17

Russian Duma passes bill allowing purchase of precious metals for foreign currency

MOSCOW. March 11 (Interfax) - The Russian State Duma has passed at its third reading a bill allowing banks to sell precious metal ingots to members of the public for foreign currency for investment purposes.

The government introduced the bill, No. 84963-8, on Thursday.

"Authorized banks may sell precious metal ingots to members of the public for foreign currency," the bill says.

The Finance Ministry said earlier that investing in gold should be an ideal alternative for citizens to buying dollars amid the unstable geopolitical situation.

The Central Bank has banned the purchase of foreign currency cash From March 9 to September 9, 2022, and has limited the amount that can be debited from existing deposits to $10,000, a move it said was necessary because of the sanctions imposed against Russia.

The branches of several Russian banks are offering gold, silver, palladium and platinum ingots. The Sberbank website on March 10 quoted a gold bar weighing 100 grams at 796,000 rubles, a silver one weighing 100 grams at 10,751 rubles, 100 grams of platinum at 442,200 rubles and palladium at 1,189,250 rubles. RBC reported earlier that market analysis showed only a few bank branches offering this service, orders to buy precious metals had to be placed with some of them a day in advance.

Sberbank said on Thursday that its purchases of gold and palladium had quadrupled in recent weeks, although it did not say to how much. The bank also said it plans to increase the number of offices authorized to sell ingots to meet increased demand.

"Precious metals are traditionally defensive assets, letting people feel safe in any economic situation. Our clients are increasingly seeking to have a physical guarantee that their savings are safe, and ingots are perfect to achieve that," a Sberbank press release quoted Sergei Shirokov, director of its Borrow and Save Division, as saying. "We plan to increase the number of bank branches authorized to sell bullion bars to meet the higher demand and help people protect their savings," he said.

Russian President Vladimir Putin on Wednesday signed the law on abolishing VAT on the sale of precious metal ingots to individuals from March 1, 2022.

Sberbank said the price of a 1-gram ingot, the smallest available, would fall in rice proportionately to 8,000 from 10,000 rubles.

Russia's Union of Gold Producers had lobbied for many years VAT to be scrapped on investment gold. The union's head, Sergei Kashuba, has said banking infrastructure was "not quite ready in terms of storage and a sufficient quantity of ingots" to start selling them quickly.