5/17/2014 Indian central bank' s forex gold reserves fall 15% | Resource Investor

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Indian central bank's forex gold reserves fall 15%
The half yearly report on foreign exchange reserves released by the Reserve Bank of India
(RBI) suggests that the total value of banks forex reserves in gold fell by 15% between
March and September last year. The yield on gold reserves fell by 2 basis points during the
period.
Gold constitutes a significant share of the countrys foreign exchange reserve in India. By
value gold accounted for $25.692 billion in March last year. The value of gold with the RBI
during end-September was $21.765 billion, falling by 15.28% over a period of six months. As
per the report, gold accounted for about 8% of the total value of foreign exchange reserves
as on end-September. The yield on gold reserves fell in accordance with the low interest
rates across developed countries.
The countrys foreign currency assets as of end-September totaled $248.8 billion, 63% of
which was invested in securities. The deposits with other central banks, Bank for
International Settlements (BIS) and the International Monetary Fund (IMF) constituted 35%.
The balance 2% was placed with foreign commercial banks and external asset managers.
The rate of earnings on foreign currency assets fell to 1.45% during the one-year period from July 2012 to June 2013. This represents a fall of 1.36%
over the year. The rate of earnings on foreign currency assets during the period from July 2011 to June 2012 was 1.47%.
BY PAUL PLOUMIS
March 18, 2014 Reprints
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