(Kitco News) After several large gold purchases by Poland and Hungary, the Central and Eastern European region now accounts for 17% of total gold purchases by world central banks in the past three years, according to the World Gold Council.

“The decisions to buy gold were strategic in nature, given the rapid structural changes in the global economy, such as changes in the international financial system and the global consequences of the pandemic,” said Tatiana Fic, director from central banks and public policies to the World Gold Council.

In March, the Hungarian central bank tripled its gold reserves to an all-time high of 94.5 tonnes. This follows the country’s 10-fold increase in gold holdings in the fourth quarter of 2018.

Next on the WGC’s list is Poland, which has also significantly increased its holdings of gold over the past three years. The National Bank of Poland bought 25.7 tonnes in the second half of 2018, followed by an additional 100 tonnes in the second quarter of 2019. This latest purchase remains the world’s largest single gold purchase of the past decade, Fic noted.

“BNP’s strategic decision to more than double its reserves was driven by the bank’s goal of diversifying geopolitical risk and strengthening the buffer protecting the country’s financial stability,” she wrote on Monday.

Serbia also grabbed the headlines with its more gradual accumulation of gold, as it has added around 0.2 tonnes of gold per quarter since 2011. In 2019, the pace of purchases accelerated with one acquisition. of 9.2 tons in the third quarter of 2019, then an additional 3.5 tons in the fourth quarter of 2019. 2020.

“The main driver of these purchases was to consolidate the stability of the Serbian financial system during a period of uncertainty and to guard against the increased risk of a global crisis,” said Fic.

She added that the increased interest in gold from the Central and Eastern European region would not stop here.

“NBP Governor Glapinski recently announced that Poland could purchase an additional 100 tonnes of gold over the next two years. Serbia, if it continues its policy of gradual gold acquisition, could also continue to add small amounts of gold to its reserves. Thus, the Central and Eastern European region could continue to be an important center for central bank gold activity in the years to come. “

The COVID-19 pandemic will continue to be a strong trigger for wanting more exposure to gold as central and eastern European banks seek protection.

“The unprecedented response of monetary and fiscal policies to the pandemic has led to a sharp rise in public debts and growing inflationary pressures, highlighting gold’s role as a safe haven and long-term store of value,” explained Fic.