Thursday, September 29, 2011

Russian Central Bank to Offer Gold-Backed Loans

Bob Murphy emails to point out some news that was not widely disseminated by MSM (I wonder why?)

Russia's central bank announced in late-August that they will start to offer gold-backed loans for up to 90 days at an interest rate of 7 percent.

The rate on the facility is in line with the central bank's Lombard rate on borrowing secured against high-quality bonds.

The instrument is not likely to see much demand at first, but it sure looks like the Russians are thinking long term and that gold is a part of their long term thoughts.

In the meantime, the latest from the Fed is that they don't own any gold, but they have "receipts" from the Treasury that may, or may not, have gold backing.


  1. Give us gold and we give you Ruble, zen we give you back gold after 90 day...unless there is crisis...zen we keep gold.

  2. 8/26/2011:

  3. Why is the lender here, the central bank, putting up collateral (ie. gold backing)?

    Typically, is not the borrower who is supposed to put collateral (ie. in case they default, there are assets that the lender can recoup to make up for the losses).

  4. Gold-Backed Loans is one great idea by the Russian Central Bank. This will be a very compelling offer for the lenders.

  5. I agree with the previous comments. This is a great idea from Russian Central Bank. I hope that other countries will also do the same.