Risk of sanctions is pushing central banks to add more gold to their reserves, says IMF's Working Paper centralbanks gold reserves
With 2022 being the year when central banks bought the most gold since 1967, more research is being done on what's driving this trend. And the latest Working Paper from the IMF points to fear of sanctions.
It’s important to note that the IMF Working Papers outline the research in progress by the authors and do not represent the views of the IMF. The paper, published Friday, was co-authored by Serkan Arslanalp, Barry Eichengreen, and Chima Simpson-Bell. "There is some evidence that multilateral sanctions imposed by these and other countries have a larger impact than unilateral sanctions on the share of reserves held in gold, since the latter leave scope for shifting reserves into the currencies of other non-sanctioning countries," the paper stated.
Based on the paper's research, the presence of financial sanctions from one of the"Big Four" currency issuers raised the gold share by around two percentage points, the authors of the report added.
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