FREE POLICY NETWORK BRIEF SERIES

Concerns about the independence of the Central Bank which changed Source: National Bank of Georgia the rule of handling sanctions applications for NBG emphasizes in its official statement that Georgia’s citizens and legislative initiatives like the the acquisition of gold is not merely symbolic Law of Transparency of Foreign Influence, which but rather reflects a deliberate strategy aimed deviates. [...] The Central Bank of Bolivia exchange rates, a nation's fiscal stability, the and the Central Bank of Turkey also reduced their threat of sanctions, and the degree of openness in gold holdings, primarily to address domestic its trade (see Figure 4 for details). [...] Figure 4: Determinants of Gold Shares: Emerging Market and The USA continues to hold the largest gold reserve Developing Economies (25.4% of total gold reserves), which underscores the metal's enduring appeal as a store of value among the world's leading economies. [...] The decision Purchase of gold from IMF by G7 countries to freeze the foreign exchange Sri Lanka 2009 8% 299% following the global reserves of the Bank of Russia highlighted the financial crisis Sanctions by importance of holding reserves in a form less Mercosur and Paraguay 2012 8% 1141% vulnerable to sanctions. [...] Politically, the accumulation of gold serves decreasing liquidity and raising questions about as a strategic move to lessen dependency on the the decision made by the NBG.