Kolkata: The central banks of a many countries, mainly emerging economies, have been aggressively buying gold to boost their reserves in the past few years.
Data show that only 15 countries have bought as much as 2,000 tons. The basic objective is to diversify their reserves and reduce dependence on the US dollar, hedge against inflation and shift towards assets that are not dependent on geopolitical sanctions. Gold is thus bolstering its position as a strategic asset.
In fact, the past five years are regarded as one of the largest gold buying sprees in modern history. Apart from reducing dependence on the US dollar, the risk of currency fluctuations is also driving central banks to increase the share of gold in their reserves. World Gold Council data show that China is on top of the list of countries buying gold in the past five years.
Where does India stand?
After China, the second spot has been secured by a somewhat unlikely country — Poland, which has purchased more than 300 tons of gold. In the third place is Turkey. India comes at the fourth place. In both Turkey and India, inflation and currency instability are irritants. Therefore, gold has emerged as a tool to balance foreign exchange reserves. India is followed by Brazil which has bought significantly less quantity of the yellow metal. Other countries to add significant amounts of gold are Azerbaijan, Japan, Thailand, Hungary, and Singapore. This demonstrates Asian and emerging economies are increasingly viewing gold as a safe-haven option.
Countries to buy most gold
China: 357.1
Poland: 314.6
Turkey: 251.8
India: 245.3
Brazil: 105.1
Azerbaijan: 83.6
Japan: 80.8
Thailand: 80.6
Hungary: 78.5
Singapore: 77.3
Iraq: 74.6
Qatar: 73.0
Czech Republic: 62.8
Russia: 55.4
United Arab Emirates: 51.7
(Note: Figures in tons)
Countries which reduced reserves
Several countries also cut down on their gold reserves. The Philippines occupied the top slot in this list. It has trimmed gold reserves by as much as 65 tons. Then came Kazakhstan and Sri Lanka. The reasons were cited to be economic pressures in their economy, cash needs or strategies to balance their reserves. A few European countries too reduced gold holdings a bit.
Philippines: 65.2
Kazakhstan: 52.4
Sri Lanka: 19.1
Germany: 16.3
Mongolia: 15.9
Tajikistan: 11.9
Euro Area (average): 10.8
Colombia: 9.2
Finland: 5.4
Curaçao and St. Maarten: 3.9
Solomon Islands: 0.6
Suriname: 0.4
Malta: 0.3
Ethiopia: 0.2
Switzerland: 0.1
