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<p>The article examines the impact of changes in the gold part of the reserves of the National Bank of Kazakhstan on their total volume with an emphasis on the factor of changes in the price of gold. The value of the factor of the price of gold increases during periods of global financial crises when Kazakhstan, as an oil exporting country, is under strong pressure on the current account and the exchange rate of the tenge due to a decline in oil prices. During these periods, the National Bank conducts foreign exchange interventions to support the tenge exchange rate and spends its reserves, which increases the relevance of their safety. The paper tests the hypothesis that in such periods, the rise in the price of gold, due to its function as a safe haven asset, can compensate expenditures on foreign exchange interventions for the central banks and increase the stability of reserves. From this point of view, the article examines three periods of high turbulence in world markets of the 2000s and changes in the National Bank’s gross reserves, as well as the influence of the gold factor on these changes. It was revealed that during the crisis periods, the rise in the price of gold contributed to the stability of the gross reserves of the National Bank, and the effectiveness of this factor was directly proportional to the gold share in the reserves.</p>
</abstract>

The article examines the impact of changes in the gold part of the reserves of the National Bank of Kazakhstan on their total volume with an emphasis on the factor of changes in the price of gold. The value of the factor of the price of gold increases during periods of global financial crises when Kazakhstan, as an oil exporting country, is under strong pressure on the current account and the exchange rate of the tenge due to a decline in oil prices. During these periods, the National Bank conducts foreign exchange interventions to support the tenge exchange rate and spends its reserves, which increases the relevance of their safety. The paper tests the hypothesis that in such periods, the rise in the price of gold, due to its function as a safe haven asset, can compensate expenditures on foreign exchange interventions for the central banks and increase the stability of reserves. From this point of view, the article examines three periods of high turbulence in world markets of the 2000s and changes in the National Bank’s gross reserves, as well as the influence of the gold factor on these changes. It was revealed that during the crisis periods, the rise in the price of gold contributed to the stability of the gross reserves of the National Bank, and the effectiveness of this factor was directly proportional to the gold share in the reserves.

Gold as a Factor of Change in Central Bank Reserves in Periods of the Financial Markets Turbulence: the Case of Kazakhstan

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 International License.

The article examines the impact of changes in the gold part of the reserves of the National Bank of Kazakhstan on their total volume with an emphasis on the...

Gold as a Factor of Change in Central Bank Reserves in Periods of the Financial Markets Turbulence: the Case of Kazakhstan

Published Online: Apr 30, 2022

Page range: 209 - 224

Received: Dec 04, 2020

Accepted: Oct 12, 2021

DOI: https://doi.org/10.2478/jcbtp-2022-0020

Keywords
gold reserves, gold price, financial crisis, safe heaven asset, foreign exchange market interventions

© 2022 Vyacheslav Dodonov, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Gold as a Factor of Change in Central Bank Reserves in Periods of the Financial Markets Turbulence: the Case of Kazakhstan

Published Online: Apr 30, 2022

Page range: 209 - 224

Received: Dec 04, 2020

Accepted: Oct 12, 2021

DOI: https://doi.org/10.2478/jcbtp-2022-0020

Keywordsgold reserves, gold price, financial crisis, safe heaven asset, foreign exchange market interventions

© 2022 Vyacheslav Dodonov, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
gold reserves, gold price, financial crisis, safe heaven asset, foreign exchange market interventions