Korea returns to gold as India's dollar window draws 72.8 billion dollars
Bank of Korea has resumed gold buying after more than a decade. The Reserve Bank of India's special swap window has drawn 72.8 billion dollars since June.
Economics & Markets··Evening
Bank of Korea bought 679,765 shares in a gold fund
Bank of Korea bought 679,765 shares in the SPDR Gold Trust during the second quarter, valued at 250.41 million dollars at the end of June. The purchase marked its return to gold after more than a decade. The bank holds 104.4 tons of gold worth 4.79 billion dollars, equal to 1.1 per cent of its 427.36 billion dollars in foreign-exchange reserves at the end of June. The new purchase expanded those holdings through an exchange-traded fund rather than relying only on physical bullion.[1]
A second purchasing channel is being built for domestic gold
The bank is also building a channel to buy gold from domestic producers through the Korea Securities Depository and plans to move storage away from the Bank of England. Jung Hee-sup, director general of its reserve-management group, said the step would diversify purchasing channels. Central banks worldwide bought 289 tons of gold from April through June, a record for a second quarter, led by Poland, China and India. Bank of Korea's fund purchase and planned domestic route give it two separate ways to add the same reserve asset.[1]
The Reserve Bank of India shortened its swap-window deadline
The Reserve Bank of India said the special swap facility opened on 8 June had drawn 72.8 billion dollars by 21 August. Foreign-currency non-resident deposits supplied 65.39 billion dollars, overseas foreign-currency borrowings added 4.86 billion dollars and external commercial borrowings contributed 2.59 billion dollars. Banks brought another 13 billion dollars through the deposit window in a single week. Inflows exceeded expectations. The central bank brought the deposit deadline forward from 30 September to 31 August, while the borrowing leg remained open through 31 December. Reserves rose 9.9 billion dollars in the week to 14 August to 716.9 billion dollars, their seventh consecutive weekly increase.[2]
