Gold Reserves Current Affairs - 2020

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World Gold Council report: RBI ranks 6th in buying gold abroad

The World Gold Council (WGC) recently released its report, “World Gold Outlook 2020”. The report says that gold has performed the best since 2010 in 2019. In 2019, the gold trade in USD has increased by 18.4% as compared to 2010.

Highlights: India

According to the WGC, RBI (Reserve Bank of India) currently holds 625.2 tonnes of gold. This is 6.6% of the country’s foreign exchange. With this, India ranks sixth in the world among other central banks.

The report says that higher taxes have exacerbated the local gold price consumption. the recently introduces new hallmarking reforms are expected to increase consumer trust, remove inefficiencies, promote growth and improve confidence.

Highlights: World

The other 5 countries that have bought more gold than India include China, Russia, Kazakhstan, Turkey and Poland. The Exchange Traded Funds (ETF) of institutional investors were the second largest buyers of gold in 2019. The report predicts that they will continue to buy more gold in 2020 as well.

In 2019, the largest gold sellers were Uzbekistan and Venezuela. They sold 16.6 tonnes and 30.3 tonnes respectively.

World Gold Council

The WGC is a market development organization. The headquarters of WGC is located in London. The offices of WGC are located in China, India, US and Singapore. The WGC office in India is located in Mumbai.

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India’s forex reserves at new life-time high of $430.57 bn

According to latest Reserve Bank of India (RBI) data, India’s foreign exchange (forex) reserves surged to new life-time high of US $430.572 billion in week to August 9, 2019. It was on account of rise in foreign currency assets, the major component of the overall reserves. In the previous reporting week ended on August 2, 2019 forex reserves had declined by US $697.2 million to US $428.952 billion.

Various components of Forex reserves (in reporting week)

Foreign currency assets (FCA): It increased by US $15.2 million to US $398.739 billion.

It is expressed in dollar terms and includes effect of depreciation/appreciation of non-US currency units (US Dollar) like euro, pound and yen held in reserves.

Gold reserves: It surged by US $1.591 billion to US $26.754 billion.

Special drawing rights (SDR) with the International Monetary Fund (IMF): Increased US $6.7 million to US $1.441 billion.

Reserve position with IMF: It rose by US $7 million to US $3.636 billion.

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