The Bank of Finland currently holds around 49 tonnes of gold, said Jukka Lähdemäki, Senior Market Analyst at the Bank of Finland.
The value of gold has risen significantly over the past 20 years.
The price of the precious metal has been at its highest level in more than a decade since the beginning of April.
At the current market exchange rate, the value of Finland's gold reserves is around 3.4 billion euros. According to Lähdemäki, the value of gold has risen 30 percent since 2022.
"It's a significant amount," Lähdemäki said, but added that in context, it pales in comparison to Finland's neighbour Sweden, which boasts 125 tonnes of the precious metal. Denmark has around 66 tonnes of gold, while Norway has no gold reserves. The Bank of Norway sold off their gold in 2004 and diverted the money into foreign investments.
Why does the Bank of Finland hold gold?
Gold is stored in central banks in gold bullion, or gold bars and coins. Lähdemäki estimated that one gold bar weighs about 12.5 kilograms and is worth about 900,000 euros.
Only a small proportion of Finland's gold bars lie in domestic vaults. Lähdemäki said that the state's gold is also stored in central banks in Sweden, the United States, England and Switzerland.
The reason for the offshoring of gold is practical, Lähdemäki told Yle. Trading is more efficient at the Bank of England, for example, because the international gold market is concentrated in London.
"If you want to buy and sell gold, you have to physically move it from one place to another," Lähdemäki said.
The state also owns gold for historical reasons. In the past, the value of paper currency was tied to precious metals.
According to Lähdemäki, gold retains its value well even in times of crisis. Gold is used, for example, as a hedge against inflation.
"Gold has traditionally been seen as a good safe haven for investments," Lähdemäki said.
Gold is also attractive because it does not carry the same credit risk as equities or corporate bonds.
"A company can go bankrupt and an investor can lose money. Gold itself is not going anywhere," Lähdemäki said.
