(Adds quotes, context)
MOSCOW May 26 Russia is increasing its gold
holdings because gold is a reserve asset that is free from legal
and political risks, a senior central banker said on Tuesday.
The comments by Dmitry Tulin, who manages monetary policy at
the central bank, reflect Russian fears that the country's
overseas assets could be frozen as part of a possible toughening
of Western sanctions over the Ukraine crisis.
"As you know we are increasing our gold holdings, although
this comes with market risks," Tulin told lawmakers in the lower
house of parliament.
"The price of it (gold) swings, but on the other hand it is
a 100 percent guarantee from legal and political risks."
According to central bank data, Russia's gold reserves rose
to 40.1 million troy ounces as of May 1 compared with 39.8
million ounces a month earlier.
Russia increased its gold holdings for many months in a row
last year, as shown by central bank and International Monetary
Western sanctions imposed because of Russia's actions in
Ukraine have not targeted government assets abroad, but Russia
has been reducing its holdings of assets such as U.S. Treasury
bills, fueling speculation that it regards them as vulnerable.
Russia also faces over $50 billion in claims from former
shareholders of oil company Yukos, who have vowed to target
Russian state assets in the West.
In 2008, central bank accounts in France were frozen at the
request of Swiss firm Noga, which sought to seize Russian state
assets abroad in an attempt to recover debts arising from an
oil-for-goods deal. The central bank later argued in court it
was independent from the government, and the accounts were
(Reporting by Elena Fabrichnaya; Writing by Alexander Winning;
Editing by Hugh Lawson)