Russia’s central bank will start buying gold after a two-year hiatus as the country’s domestic producers face problems accessing international bullion markets.

The Bank of Russia said in a statement that it would “resume buying gold in the domestic precious metals market.”

The move comes after the central bank and several of the country’s biggest lenders were hit with sanctions in response to Russia’s invasion of Ukraine.

Analysts have warned that Russian producers such as Polymetal or Polyus would likely struggle to sell gold in London or New York.

As such, these companies had to turn to the Russian central bank, which can provide the rubles they need to pay staff and supplies in exchange for gold.

The Bank of Russia had just under 2,300 tonnes of gold at the end of November, according to the World Gold Council.

At current prices, its metals hoard – the sixth largest in the world – is worth $153 billion and represents about a fifth of the bank’s official reserves.

After the annexation of Crimea in 2014, the central bank stepped up its purchases of gold as domestic producers struggled to sell abroad.

Between 2014 and 2019, it acquired more than 1,200 tonnes of gold, according to WGC data.

For Moscow, the purchases were also a way to reduce the country’s exposure to the US dollar in its official reserves.

The Bank of Russia halted purchases in April 2020 as oil prices fell due to the pandemic, affecting the country’s national income. It has kept its stock steady ever since.

“It will probably be viewed as initially bullish by the market, but the whole point of buying gold (in the domestic market) is to monetize it if necessary,” said MKS Pamp analyst Nicky Shiels. “We’re building a war chest of this size for times like these.”