Ukraine Breaks Records With Gold Reserves

( – Ukraine isn’t having a great time right now. It’s under daily bombardment by artillery, aircraft and cruise missiles. Almost a fifth of its territory is currently occupied by the Russian army. A quarter of its population was forced to leave their homes by the fighting. It isn’t all bad news, though. Thanks to the foreign aid that’s flooded in, Ukraine’s cash reserves are the highest they’ve ever been.

The National Bank of Ukraine has just announced that as of July 1, the country’s foreign reserves are $38.99 billion. That’s up from $37.3 billion in June and almost a billion ahead of the previous record of $38 billion in 2011. The bank is quite open about where all this money came from; its announcement credited its swelling balance to “sustained and regular inflows from international partners.” It went on to list some of the payments Ukraine received in June, including $1.2 billion from the US.

The new figures mean Ukraine’s foreign reserve balance is ranked 47th in the world, just below Nigeria. By contrast, Russia is ranked fifth with $582.4 billion, and China is first with $3.37 trillion. The US is actually further down the list than either of its rivals, ranking 13th with $242.7 billion in reserves, but there’s a reason for that. The US dollar is the world’s leading reserve currency, so there’s no real point in the US holding reserves of other currencies. Instead, we have the world’s largest gold reserves — 8,133.5 tons of the metal, stored in a fortified vault at Fort Knox, Kentucky.

Foreign exchange reserves are important; central banks can use them to improve the balance of payments and prop up the currency, and healthy reserves build confidence in the economy. Ukraine’s people and territory might be suffering from the war, but its economic foundations are doing pretty well.

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