Russia's Prime Minister Vladimir Putin (2nd R) holds an ingot of gold as he visits the precious metals safe vault of the Central Bank in Moscow January 24, 2011. REUTERS/Alexsey Druginyn/RIA Novosti/Pool
Russia Is a Threat to US, Senior Admiral Tells Senate Panel, IN PHOTO: Russia's Prime Minister Vladimir Putin (2nd R) holds an ingot of gold as he visits the precious metals safe vault of the Central Bank in Moscow January 24, 2011. Reuters/Alexsey Druginyn

Days after a report by the World Gold Council, or WGC, disclosed Russia increased its gold reserves in November, the country's Central Bank disclosed it had divested some of its precious safe have yellow metal gold to help keep the economy afloat.

Portal Vesti Finance said the Russian Central Bank decreased the country's international reserves to billion from billion, or billion, during Nov. 28 to Dec. 5. The WGC report said the Russian central bank had been consistent in adding gold to its reserves. On the months of July to October alone, it purchased an equivalent 74 tonnes of gold from the domestic market.

WGC said that as of end November, Russia's gold holdings grew by 18.9 tonnes, rendering its total reserves at 1,168.7 tonnes. The figure accounts for 10.2 percent of its total reserves. WGC said Russia is the world's sixth-largest holder of the yellow metal.

Vesti Finance said the central bank divested some of the country's gold holdings "in order to maintain the exchange rate." According to the Telegraph, Russia was buying cheaper gold as a safe measure "for the possibility of a long-lasting economic war" following the sanctions the West had imposed. Such measures have actually began to hurt the Russian economy, coupled with falling oil prices. About 45 percent of Russia's government's budget receipts come from revenues from the sale of oil and gas. Oil prices have dropped from a high per barrel at the start of the year to per barrel at present.

Apart from Russia, the other biggest gold buyers in the third quarter were countries from the Commonwealth of Independent States, led by Kazakhstan and Azerbaijan, the WGC said. The council noted Russia had actually tripled its gold holdings over the past 10 years, but it was only recently that it touched and divested its massive reserves.

To further counter the plummeting ruble and fight inflation, the Russian Central Bank of Thursday hiked rates to 10.5 percent from the previous 9.5 percent. The country's inflation had reached 9.1 percent in November.

The WGC report showed total gold acquisition by global central banks recorded at 93 tonnes in the third quarter, highly attributed to "a combination of geopolitical tensions and attempts to diversify reserves away from the US dollar." Alistair Hewitt, head of market intelligence at the World Gold Council, said central banks will have acquired up to 500 tonnes of gold by yearend.