Russian central bank may start buying gold on Moscow Exchange -sources

MOSCOW, Oct 10 (Reuters) - Russia’s central bank may start buying gold for its official reserves on the Moscow Exchange, two people familiar with the matter told Reuters.

The Russian central bank is one of the world’s largest holders of bullion and the switch would boost currently low turnover in gold trading on the Moscow Exchange, which only launched a precious metals market in 2013.

The bank has been regularly buying gold as it wrestles with weaker oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis. It has access to gold trading on the Moscow Exchange but has not been active so far, trading gold on the over-the-counter (OTC) market instead.

The two sources said a final decision had yet to be taken but senior central bank officials were looking at what volumes could be bought via the exchange - which serves as an equity, bond, foreign exchange and derivatives market - and from what date.

Buying gold on the exchange would be a smoother process than buying on the OTC, but the exchange’s turnover in gold trading is still relatively low. It would also improve transparency in the country’s gold market, something the central bank has been working on across financial markets.

The central bank is considering buying bullion on the exchange “in small amounts”, one of the two sources, who works in the banking sector and is familiar with the central bank’s plans, said.

Igor Marich, managing director of the Moscow Exchange’s money and derivatives market, told Reuters he had not been informed of when the central bank might start buying gold on the bourse.

The central bank’s press office declined to comment.

Central bank data shows the bank bought 131 tonnes of gold for its reserves in the first nine months of 2017, purchasing between 6 and 31 tonnes a month on the interbank market.

The bank’s gold reserves totalled $73.6 billion as of early this month, compared with $65.5 billion a year ago, according to its data.

Metallinvestbank is the main precious metals market maker on the Moscow Exchange. Other players in the gold and silver market include Otkritie Bank, Promsvyazbank, Maritime Bank and Russian Agricultural Bank, according to the Moscow Exchange. (Additional reporting by Diana Asonova; Writing by Andrey Ostroukh; Editing by Susan Fenton)