(RTTNews) - Amid speculation that the country's central bank may buy more gold from the IMF, Prime Minister's Economic Advisory Council Chief C. Rangarajan said the RBI could wait for some more time before making another purchase, media reports said. He opined that there has been a considerable increase in the total quantity of gold with the bank.
Rangarajan reportedly said that the investment made in gold was very small and this does not mean that the RBI has bought it to increase the value of reserves due to weakening of dollar. He said that the RBI might have already shifted in favor of other currencies, but a major share of its total reserves is still kept as dollars.
The former RBI governor said that the apex bank has balanced its proportion of gold in the wake of raising forex reserves. The 200 tonne gold buy by the RBI in November constitutes only 2.35% of its total forex reserves of 284.3 billion dollars at that point of time thereby increasing the gold reserves to 557 tonnes.
When asked on how much the RBI should maintain in the form of gold, Rangarajan said that as such there is no rule but maintaining a proportion of the reserves as gold is good.
While the RBI officials remain tight lipped on some more gold buy, it is to be noted that in early 1990s the country had to pledge around 68 tonnes of gold with the Bank of England and Union Bank of Switzerland to tide over balance of payments crisis.
Source : forextv.com