Falling gold prices amid the worst selloff in more than three decades provide an opportunity for monetary authorities to increase their holding of the metal, Governor of the Central Bank, Ajith Nivard Cabraal said.
Sri Lanka will also be examining “quite favorably” the opportunity to purchase more gold to bolster its foreign-exchange reserves, the Governor said yesterday (16) in an interview with Bloomberg Television.
“Overall, gold prices coming down is giving an opportunity to various central banks across the world to improve on their holdings,” he said. “An opportunity that provides us with space to purchase a little more quantities and hold in our own reserves would be an interesting one.”
Slowing economic growth in China, Goldman Sachs Group Inc.’s recommendation to sell gold and speculation the U.S. Federal Reserve will taper off its bond-buying program have contributed to a tumble in commodities. Gold has dropped 19 percent since the end of December after rising for 12 years, and plunged 9.1 percent yesterday, the biggest loss since 1983, stated Bloomberg.
The Bank of Korea said price moves in the short term are an “unavoidable risk” and the gold price drop is “not a big concern,” as its holdings are part of its long-term strategy for asset diversification.
“Sri Lanka as a community is interested in holding gold stock,” Cabraal further said.