Russians warned about the risks of investing in gold and yuan – Rosbalt

Many Russians are looking to invest in gold, the Chinese yuan and depreciated stocks amid the disappearance of the opportunity to invest in dollars and euros in connection with the sanctions imposed by Western countries against Russia because of its special military operation in Ukraine. Oksana Karpenko, Associate Professor of the Faculty of Economics at RUDN University, told PRIME about this.

According to her, now the Russian stock market is extremely volatile: the exchange rate for securities is changing a lot, geopolitical tension has not decreased and may even intensify.

“So before you decide on such investments, you should carefully study whether sanctions are imposed on the company, what risks it has, whether it enjoys the support of the state,” Karpenko said.

In her opinion, gold in coins and bars is a good investment, given the recent abolition of VAT (20%) on the purchase of gold bars for individuals. True, gold prices have risen over the past year less than the dollar against the ruble, by only 35%.

“But gold is a long-term investment tool: its prices may drop in the moment if the geopolitical situation normalizes, plus the low liquidity of gold compared to the US dollar and the large spread of banks,” Karpenko explained.

Buying yuan in Russian commercial banks is still difficult. “True, some systemically important banks (for example, VTB) offer opening deposits in non-cash yuan. Rates on such deposits are about 8% per annum, terms – from three to six months. When opening such a deposit, one should also keep in mind the geopolitical risks of China and possible sanctions,” the expert warned.

It should be noted that today, speaking in the State Duma, Deputy Finance Minister Alexei Moiseev stated that some Russians succumbed to panic, bought foreign currency and now do not know what to do with it. In this regard, the Ministry of Finance proposes to give the opportunity to buy gold on it.

Recall that on February 21, 2022, Russian President Vladimir Putin signed decrees recognizing the independence of the self-proclaimed Donetsk and Luhansk People’s Republics (DPR and LPR), and on February 24 he made an emergency appeal to the Russians and announced a special military operation in Donbass. In his speech, he stated that “circumstances require decisive action from Russia” and stressed that “Russia will not allow Ukraine to have nuclear weapons.”

In response to Russia’s actions, Western countries (USA, Canada, European Union, Great Britain, Japan) announced new, tougher sanctions against the Russian Federation, including financial and economic ones.

In particular, Russian banks fell under the sanctions, including Sberbank, VTB, Novikombank, FC Otkritie and Sovcombank, and for a number of state-owned companies it was difficult to attract foreign capital.

Later, the EU countries and the United States agreed to disconnect Russian banks that fell under sanctions from the international system of interbank transactions and information exchange SWIFT. In addition, it was decided to freeze the assets of the Bank of Russia, which will create difficulties for its use of international reserves. EU countries also pledged to take steps to limit the sale of citizenship — the so-called “golden passports” that allow wealthy Russians connected to the Russian government to become citizens of EU states and gain access to their financial systems. In addition, the European Union, the United States, Canada and a number of other countries have closed the sky for Russian aircraft.

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