In order to avoid the negative impact of the global crisis on the economic development of Ukraine, the National Bank of Ukraine makes continuous efforts to seek a greater diversification of Ukraine’s international reserves.

As of 1 December 2012 the international reserves of Ukraine stood at USD 25.3 billion. As before, the foreign currency reserves remain the main component of the international reserves, their share exceeding 90%.

However, due to the efforts by the National Bank of Ukraine, since the beginning of 2012, the amount of monetary gold in Ukraine’s international reserves had climbed by 25.5% (or 230,000 troy ounces) to 1.13 million troy ounces as of the beginning of December 2012.

The share of monetary gold in Ukraine’s international reserves has almost doubled from 4.36% (at the start of 2012) to 7.72% (in December 2012).

The share of monetary gold in European countries’ gold and forex reserves accounts for 15%, and Ukraine is nearing that figure.

As of today, Ukraine ranks 45th among other countries in terms of the share of monetary gold in its international reserves (calculated based on the data provided by Bloomberg Finance L.P.) , and there are all the grounds for a rise in the share, taking into account the growth rates.

For reference.

The international reserves (reserve assets) comprise a portion of foreign assets held and managed by the central bank and used to directly finance the balance of payments deficit or exert an indirect impact on the size of this deficit. In particular, the international reserves comprise holdings of monetary gold, the reserve position of the country in the IMF, special drawing rights, and foreign exchange.

Monetary gold takes the form of coins, ingots, or bars with a purity of at least 995 parts per thousand, which is owned or controlled by a central bank or a government agency.

Gold remains an “ideal asset” for the central bank as its value is not dependent on the monetary or exchange rate policy of foreign countries. Furthermore, gold is viewed to offer the best protection against inflation.