Daily Management Review

Nation of Gold Bugs Being Built by Currency Pioneers on Ex-Soviet Fringes


02/17/2017




Nation of Gold Bugs Being Built by Currency Pioneers on Ex-Soviet Fringes
By shifting savings from cattle to gold, an experiment with little parallel worldwide is being embarked upon by a landlocked nation perched between China and Kazakhstan.
 
Kyrgyzstan’s central bank wants every citizen to diversify into gold and the country was one of the first post-Soviet republics to adopt a new currency and let it trade freely. This Central Asian country’s biggest export is gold and the “dream” is for every one of the 6 million citizens to own at least 100 grams (3.5 ounces) of the precious metal, according to Governor Tolkunbek Abdygulov.
 
 “Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he said in an interview. “I’ll try to turn the dream into reality faster.”
 
Abdygulov, 40, said by phone from the capital, Bishkek that about 140 kilograms of bullion have been sold, in the two years that the central bank has offered bars directly to the population.
 
“We are hopeful that our country’s population will learn to diversify its savings into assets that are more liquid and -- more importantly -- capable of retaining their value,” he said. According to Abdygulov, cattle is still the asset of choice for investors and savers in rural areas.
 
By stepping up buying even as its counterparts cut purchase in 2016 to a six-year low, Kyrgyzstan has bucked a trend among central banks, the biggest owners of bullion. According to the World Gold Council, global combined bar and coin demand fell.
 
Gold is often seen as the ultimate haven at times of upheaval and it does not need any extra promotion across the emerging world. By encouraging its citizens to deposit private gold holdings in banks, India, the world’s largest consumer after China, is in fact taking steps to curb imports of the precious metal.
 
The Turkish people were called to convert their foreign-currency savings into liras and gold by the President Recep Tayyip Erdogan last year in a country where banks can use bullion as part of their reserve assets.
 
By providing infrastructure for safe-keeping and investment, the central bank of Kyrgyzstan has been trying to win conversion. Varying in weight from 1 to 100 grams, the central bank produces bars of different sizes.
 
If all of the country’s population converts to gold, it would be equivalent to 30 times the nation’s current annual output and about 600 tons of gold and hence the central bank governor believes his plan is realistic. The timeframe for when his goal of 100 grams per person can be met was declined by Abdygulov.
 
He said that safe deposit boxes at commercial lenders or with the central bank are included in the options available for storage. According to Abdygulov, some people even bury gold in the ground or keep gold at home.
 
“For Kyrgyzstan, gold is an alternative instrument of investment,” Abdygulov said. “The National Bank has ensured liquidity for gold -- we aren’t only selling, but also buying back gold bars that we produced and sold.”
 
(Source:www.bloomberg.com) 






Science & Technology

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

Google introduces new smartphone and beta Android Q

SpaceX’s Dragon Crew Capsule Test Met With Anomaly

New Security Study Finds Millions Use 123456 As Password For Email Accounts

The Devastating Panama Disease Could Spell Extinction For Bananas

Walmart to hire 4 thousand robot cleaners

Samsung Galaxy Fold: Expensive but fragile

USA and South Korea launch the first commercial 5G networks

Deliveries of AR/VR devices to grow by 54% in 2019

World Politics

World & Politics

Theresa May to resign on June 7

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General

Is Finland’s aging population turning the country into Japan?

The United States will impose new duties on Chinese goods on Friday

Jyrki Katainen: EU is not a milk cow

Oil lobby and the planet's future

Trump files a lawsuit against Deutsche Bank and Capital One

Trump Urged Abe To Influence Japanese Auto Firm To Produce More Vehicles In The U.S.