Wait...
  1. Home >
  2. Export Import News >
  3. Foreign Exchange >
  4. RBI buys gold for first time in nearly a decade >
  5. RBI buys gold for first time in nearly a decade

Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

RBI buys gold for first time in nearly a decade.


Date: 03-09-2018
Subject: RBI buys gold for first time in nearly a decade
MUMBAI: The Reserve Bank of India (RBI) has bought gold for the first time in nearly a decade, signalling that the metal could be in demand as a store of value when returns and capital values of fixed-income bonds are declining in a rising rate environment. 

The RBI added 8.46 metric tonnes of gold to its stock of holdings during the financial year 2017-18 that ended June 30, taking the level of gold reserves to 566.23 metric tonnes, according to its latest annual report. 

It last bought 200 metric tonnes from the IMF to boost its reserves in November 2009. 

Over the past nine years, the gold stock in RBI reserves was stable at 17.9 million troy ounce. But RBI has started adding to its stock since December 2017, data submitted to the IMF indicate. 

Stock of gold, as of June 30, amounted to 18.20 million troy ounce or equivalent to 566.23 metric tonnes, up from 17.9 million troy ounce in November, 2017. 

The RBI’s decision to buy gold is significant because unlike many other central banks such as the People’s Bank of China, RBI does not regularly trade in gold, although the RBI Act permits it to do so. 

Economists reckon that investing in gold is a prudent treasury move by the central bank at a time of rising yields. RBI has already sold close to $10 billion worth US treasury securities between April and June, data with the US treasury department suggest. 

“The addition of gold to RBI’s forex reserves is probably a diversification of assets for their deployment, keeping in mind both the build-up of reserves in 2017 as well as the evolving global risks, including market volatility and rising policy rates in the US,” said Saugata Bhattacharya, chief India economist at Axis Bank. 

Rising yields could trigger mark-tomarket losses for RBI’s bond portfolio. Of the $405 billion worth reserves with the central bank, $245 billion were held in the form of bonds and securities as of June 30, data submitted to the IMF show. 

Diversifying reserves to include gold is a prudent measure at such times. The Annual Report points out that RBI continued diversification of foreign currency assets with attention to risk management. The gold portfolio had also “been activated,” said Bhattacharya. 

The RBI did not say where it bought the gold from or the reasons for such transactions. But economists say that the central bank might also want to create a buffer to meet the redemption needs of Gold Bond Schemes through which it sold bonds worth more than ?4,000 crore. 

The RBI has to redeem the three- to eight-year bonds at the prevailing price of the metal and keep an extra stock of gold in its kitty to hedge against price risks. 

Source: economictimes.indiatimes.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Both
 Buyers
 Suppliers
 Both
OR
 Exim Help
+


What is New?

Date: 24-01-2020
Notification No. 01/2020-Customs (ADD)
seeks to amend notification No. 40/2017-Customs(ADD) dated 25-08-2017, to revise anti-dumping duty on imports of "Sodium Nitrite" originating in or exported from China PR, in pursuance of final findings of sunset review investigations issued by DGTR vide notification No. 15/06/2016-DGTR dated the 8th November 2019..

Date: 23-01-2020
A.P. (DIR Series) Circular No.20
Merchanting Trade Transactions (MTT) – Revised Guidelines

Date: 23-01-2020
A.P. (DIR Series) Circular No.19
‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt – relaxations

Date: 23-01-2020
A.P. (DIR Series) Circular No.18
Investment by Foreign Portfolio Investors (FPI) in Debt

Date: 21-01-2020
Circular No. 4/2020 – Customs
Clarification relating to import of gifts - Reg

Date: 20-01-2020
A.P. (DIR Series) Circular No.17
Introduction of Rupee derivatives at International Financial Services Centres (IFSC)

Date: 17-01-2020
TRADE NOTICE NO. 46/2019-20
Mis-classification goods under 'Others' category at the time of Import- reg.

Date: 16-01-2020
Notification No.05/2020 - Customs (N.T.)
Exchange Rates Notification No.05/2020-Custom (NT) dated 16.01.2020.

Date: 15-01-2020
Notification No. 03/2020- Customs (N.T.)
Notification of Ghasuapara LCS for imports also by amendment of Notification No. 63/1994-Customs dated 21st November 1994

Date: 15-01-2020
Notification No. 04/2020-CUSTOMS (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seed, Areca nut, Gold & Silver - reg.



Exim Guru Copyright © 1999-2020 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.

EximGuru.com

C/o Infodrive India
E-2, 3rd Floor, Kalkaji Main Road
New Delhi - 110019, India
Phone : 011 - 40703001