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. Last Updated: 07/27/2016

Sberbank Signs Deals for 20 Tons of Gold

State-owned savings bank Sberbank announced Wednesday that it has signed contracts to buy more than 20 tons of gold this year, a move that will help give the Central Bank a larger corner of the gold market.

Upon making the purchases, Sberbank has agreed to sell the gold directly to the Central Bank, Sberbank spokesman Alexander Golovanov said.

The deal gives the Central Bank a victory in an ongoing struggle with commercial banks to reap the hard currency returns offered by trading the dollar-backed metal.

By selling directly to the Central Bank and not exporting the metal, Sberbank will not be affected by a new punitive 5 percent tariff on gold exports.

Golovanov said Sberbank plans to buy at least 50 tons of gold this year, even though Russia's gold production is estimated at just 100 tons.

At least eight commercial banks, including Avtobank, Rossiisky Kredit, Rosbank and Lantabank, have been jostling to buy gold from producers for export in an attempt to find a stable source of dollar income.

But analysts said the punitive export tariff could give the Central Bank the upper hand by pushing down commercial exporters' profit margins and forcing them to sell to the Central Bank.

Under Russian law, the Central Bank is prohibited from purchasing gold directly from producers.