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Central Bank clarifies misinterpretations on the reduction of gold reserves

Clarifying the media reports on the selling of gold reserves,the Central Bank says the changes in the composition of official reserves is in accordance with the current reserve management needs and priorities, considering all aspects of the reserve management requirements.

 Issuing a media release the CB claims that its gold holdings by end 2008 was only US$ 92 million (3.6 per cent of gross official reserves of US$ 2.6 billion), but was gradually increased by end 2014 to $ 893 million (10.9 per cent of gross official reserves of $ 8.2 billion). 

Hence, it is evident that the share of gold holdings in the reserve may change from time to time, reflecting the needs of the CB to buy, hold or liquidate its gold holdings in accordance with the prevailing reserve management priorities. 

In that background, while the CB’s gold holdings by end 2021 may have decreased to $ 175 million (5.6 per cent of gross official reserves of $ 3.1 billion) based on the need to enhance the liquidity of the reserve portfolio, the CB may, at a future date, consider increasing its gold holdings when the foreign reserve levels grow to values that may warrant a change in the composition of the reserve portfolio.

International reserve management of a central bank is a dynamic and technical process which is usually designed to ensure that a country’s foreign assets are readily available and controlled to achieve a defined range of objectives. 

Accordingly, the adoption of appropriate reserve management policies relating to the asset composition, currency mix, liquidity needs, tenor, profitability, safety, etc. of investment instruments could vary from country to country and would depend on the country specific circumstances and economic priorities.  

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