According the World Gold Council (WGC) the Central Bank of Russia purchased 55 tonnes of gold in the third quarter to become the world’s largest buyer of physical gold.

The Kremlin has tripled its official holding over the last decade to 1,150 tonnes, which is the world’s sixth largest holding. These reserves may provide Putin with vital firepower to defend the rouble against further declines in the currency markets. The rouble has declined significantly in recent weeks as U.S. lead sanctions start to impact the Russian economy.

The former Soviet States of Azerbaijan and Kazakhstan have also taken advantage of the lower gold price in Q3 to significantly increase their gold holdings.

In total, central bank buying reached 93 tonnes in the third quarter making it the 15th consecutive quarter of net purchases.

In the report the WGC said Central banks are buying gold in attempt to diversify their holdings away from the U.S dollar and to protect themselves from geopolitical events. The WGC expects total central bank buying to reach 500 tonnes by the end of 2014.