Sri Lanka considers buying more gold
Sri Lanka is considering buying more gold from international markets taking the view that falling prices are an opportunity for the country to raise gold reserves, a top Central Bank (CB) official said.
The CB was also exploring this possibility by using Sri Lanka’s growing foreign exchange reserves and maximizing the return.He declined to comment on the quantity of gold purchases it hoped to make this year but revealed that during 2012 the CB purchased 23.69 metric tons of gold and sold 20.04 metric tons resulting in net purchases of 3.64 metric tons.
The CB actively buys and sells gold from international markets depending on the market price movements for the purpose of the reserve management activities, he disclosed.
The amount of gold reserves in possession by the bank as at the end of December 2012 was 13.62 metric tons valued at US$727 million.
Gold was being sold throughout the year at different prices and the average price amounted to $1701 per troy ounce in 2012.
Gold outstanding as of the beginning of 2012 was 9.98 metric tons and at the end of the year it has increased to 13.62 metric tons, he disclosed. But it does not hold gold locally.
The CB carries out its gold trading activities to make profit by exploiting the opportunities arising from the price fluctuations in the international market.
Sri Lanka’s counter parties for gold trading are HSBC Bank London, UBS Zurich, JP Morgan Chase Bank, Credit Suisse Bank, Bank of International Settlement, Merril Lynch international bank, Bank of Nova Scotia, Standard Chartered Bank and ANZ Bank.
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