rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » After 9 years, RBI once again adds gold to forex reserves

After 9 years, RBI once again adds gold to forex reserves

August 03, 2018 13:04 IST

In April and May, there were additions by RBI of 600 kg and 900 kg. RBI’s total gold holding is now 561.9 tonnes.

The Reserve Bank of India has added some gold to its reserves. According to the World Gold Council’s trend report for the June quarter, the central bank bought 2.5 tonnes in March, following a fractional 0.3-tonne addition in December.

 

These increases are the first since November 2009, when it bought 200 tonnes from the International Monetary Fund, said the WGC.

In April and May, there were additions by RBI of 600 kg and 900 kg. RBI’s total gold holding is now 561.9 tonnes.

Somasundaram P R, managing director for India at the WGC, said: “There is currently little to suggest a strategic move but it is noteworthy, given how long the level of gold reserves have been unchanged.”

Globally, central bank net purchases in the June quarter, the second one (Q2) of this calendar year, were seven per cent lower from the year before, at 89.4 tonnes.

Net purchases over the first half (H1) of the calendar year were eight per cent more than last year, at 193.3 tonnes, said the WGC report.

While the pace of purchasing lags that of recent years, volumes remain healthy.

Net purchases were driven by Russia, Kazakhstan and Turkey.

Russia again led the way, accumulating a net 53.2t, about 49 per cent up on Q2 of 2017.

This brought H1 net purchases to 105.3t (five per cent up) and its gold reserves to 1,944 tonnes at the end of June (17 per cent of total reserves).

Russia’s appetite is strategic - with geopolitical tensions, it looks to diversify away from the dollar.

The Kazakh central bank’s gold reserves grew by 11.6 tonnes during Q2 to 20.7 tonnes (three per cent up over a year).

The country’s gold reserves have now grown for 68 consecutive months and their legislature has asked the central bank to further increase these, in the face of geopolitical and economic worries, and uncertainty arising from the global shift towards a multi-currency system.

Turkey’s central bank’s gold reserves totalled 240.2 tonnes at the end of June, over double since May 2017, when it started gold buying.

Venezuela, which is facing a foreign exchange crisis, was a seller of gold from its reserves in the June quarter, of 11.9 tonnes.

Photograh: Leonhard Foeger/Reuters

Rajesh Bhayani in Mumbai
Source: