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Czechs own twice as much gold as the Czech National Bank.

by Seerat Fayaz   ·  January 31, 2022   ·  

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Private home gold holdings in the Czech Republic are twice as large as the Czech National Bank’s gold reserves. 

Private persons in the Czech Republic presently hold 19.35 tonnes of gold, according to government figures. This is more than twice the quantity of gold housed in the vaults of the Czech National Bank, which stood at 10.6 tonnes at the end of 2021. In affluent nations, such disparities are extremely prevalent. 

German homeowners, for example, possess more than 9,000 tonnes of gold, while the Bundesbank has 3,362 tonnes. In Italy, 6,418 tonnes of gold are privately owned, compared to 2,452 tonnes owned by the Central Bank, while 4,714 tonnes of gold are privately owned in France, compared to 2,436 tonnes in the bank.

Gold, according to the Czech National Bank, is not an ideal medium for modern central banks to retain foreign exchange reserves. 

Gold has no practical use for the central bank’s monetary policy and does not function as foreign currency reserves in the true meaning of the term. 

Foreign exchange reserves are unique in that they can be purchased or traded at any moment. Gold is insufficiently liquid, its value is very erratic, and its operational costs are expensive. 

In 2021, the Czech National Bank acquired 1.25 tonnes of gold for its foreign exchange reserves four times. However, after subtracting gold utilised in the creation of gold coins, net purchases amounted to 777.5 kilos.

In 2020, the central bank began its gold purchases, purchasing around 1,835 kg. He noted that the trend of rising gold holdings in the central bank’s vaults in recent years is clear. 

Since 2009, the Czech Statistical Office has started tracking the quantity of gold imported into the Czech Republic. Total imports of the precious metal in different forms – from gold dust for the electrical sector to semi-finished items such as plates, sheets, and wires for the jewellery industry – reached at 73 tonnes at the end of November last year.

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