Sri Lanka central bank may buy gold: CB Governor

Apr 17, 2013 (LBO) – Sri Lanka’s central bank, an active trader in gold which cut its holdings last year may buy into gold, now that it is falling, Central Bank Governor Nivard Cabraal has said. “Overall, gold prices coming down is giving an opportunity to various central banks across the world to improve on their holdings,” Cabraal told Bloomberg television in an interview.

“An opportunity that provides us with space to purchase a little more quantities and hold in our own reserves would be an interesting one.”

Sri Lanka’s central bank which had as much as 16 tonnes of gold by mid 2011 has gradually sold down its stock, helping boost returns on its reserve assets and central bank profits.

By the end of 2011 its gold stock was down to 9.98 tonnes and by end 2012 it was down to 3.6 tonnes, according to World Gold Council data.

During the last credit bubble that ended in 2008 gold went up to around 1,300 dollars an ounce, fell to 900 and climbed back to 1,800 dollars an ounce amid quantity easing by the Fed and other central banks.

Now gold has tumbled to about 1375 dollars an ounce and oil and other commodity prices are also falling.

Before the First World War mone