Centre denies report that RBI may have sold gold worth $12 billion to support forex reserves
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The Reserve Bank of India may have sold gold worth about $12 billion in May to protect foreign exchange reserves, Bloomberg reported on Tuesday. The Union government denied the claims.
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RBI bullion reserves may have fallen in the two weeks till May 22 even as foreign currency assets increased by about $7.5 billion, according to Bloomberg Economics’ analysis of publicly available data.
The pattern pointed to possible gold sales by the central bank, the news outlet claimed.
The decline in reported gold values came despite an increase in import duties on the metal, which would have normally raised the valuation of the central bank’s gold holdings.
On May 13, India raised import tariffs on gold and silver to 15% from 6% to reduce imports of the precious metals and ease pressure on the country’s foreign exchange reserves.
The move had come after Prime Minister Narendra Modi urged citizens to avoid buying gold and adopt “nationally responsible” lifestyle choices to help the country withstand global economic uncertainty caused by the war in West Asia.
The divergence points to the possibility of gold having been sold by the central bank during the period, the Bloomberg report claimed.
Such a move, if confirmed, would reflect policymakers’ concerns about the pressure on foreign exchange reserves amid higher oil prices linked to the war, the report...