Russian economy faces meltdown as country tears through gold reserves

Russia’s economy is facing fresh turmoil as the country burns through its gold reserves amid record-high .

Business outlet RBC said, citing data from ‘s Central Bank, that metal reserves tanked to the lowest level since 2022 at the end of st year.

RBC said reserves shot down by 46.4% in 2024, equivalent to over 33 metric tonnes. It explained: “Physical gold reserves in Russian banks at the end of 2024 fell sharply … This is due to the Bank of .”

According to the outlet, the country now has 38.1 metric tonnes of physical gold reserves worth 325 billion rubles (£2.7 billion).

However, the Central Bank painted , saying physical gold dropped to the lowest level since the pandemic in 2020. In monetary terms, gold reserves saw a 23.6% decline in 2024, it added.

This has been linked to record-high as 21%, aimed at countering inflation at 9.5% due to high military spending and a labour shortage.

Despite this, gold prices soared to record highs 40 times last year. The World Gold Council said Russians bought 75.6 metric tonnes of the metal last year – an increase of 6% from 2023 and 62% from 2021, before the war in .

This comes from increasing economic sanctions on , a tanking ruble, and restrictions on international payments, making gold more attractive.

has tried to circumvent these sanctions, using his prized .

These ships have avoided sanctions by changing ownership through shell companies in the Middle East, causing the number of shadow fleet vessels to rise from 13% to 42% between 2022 and 2023.

Oil has been a lifeline for the Russian economy during the nearly three-year-long war. Still, economic sanctions from the West and Ukrainian drone strikes on refineries have put it in jeopardy.

Former senior British military intelligence officer Philip Ingram said ‘s oil revenue is the “one thing” that’s keeping it in the fight against .

He said in 2025 as its vital oil supplies and exports are hit with sanctions and drone strikes.