Hungarys central bank has announced the country has boosted its gold reserves tenfold to 31.5 tons. The regulator says it wants to improve the security of the nations wealth and to reduce risks.
According to the banks governor, Gyorgy Matolcsy, the decision was of “economic and national strategic importance” and has been made after Prime Minister Viktor Orban requested a year ago that the bank assess its gold strategy.
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Matolcsy has also recalled Hungarys heritage as one of the worlds largest gold producers in the Middle Ages.
Gold now accounts for 4.4 percent of Hungarys national banks reserves, according to the banks vice-president Marton Nagy.
READ MORE: World running out of gold & theres no substitute, experts warn
The purchase of the precious metal takes Hungarys holdings to the highest in almost three decades, but the country is still a relatively small bullion holder. It ranks outside the top 50 globally, according to World Gold Council data.
“Its a strange move, a big increase, and it seems quite high,” Timothy Ash of Bluebay Asset Management told the Financial Times.
He said that “people are struggling to understand the logic behind it,” adding that at a time when Budapest was having “challenging” relations with Brussels, the move could be viewed as an assertion of independence.
Last month, Poland raised its gold holdings to the highest level (about 117 tons) in at least 35 years.
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