Sri Lanka has 10-pct of foreign reserves in gold: WGC

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

Mar 17, 2010 (LBO) – Gold now makes up 10 percent of Sri Lanka’s foreign reserve assets after the country tripled its gold holdings with a purchase from the International Monetary Fund in 2009, industry data showed.

The United States remained the largest gold holder with 8,133.5 tonnes, Germany second with 3,406.8 tonnes and the IMF third with 3,005.3 tonnes.

US accumulated large volumes of gold up to the second World War as war-torn Europe printed money and lost reserves through two world wars despite lifting convertibility at different points in time during the ‘gold standard’ period.

By 1950 the US had accumulated 20,000 tonnes of gold strengthening its case to create a dollar pegged monetary system during the Bretton Woods negotiations and weakening Britain’s John Maynard Keynes proposals for an alternative system.

IMF reserves were created from contributions mainly from developed nations.

However following the creation of the Bretton Woods system, the US steadily lost reserves due to loose monetary policy.

By 1971 US gold reserves were down to 9,000 tonnes and the US defaulted on the Bretton Woods system and lifted gold convertibility.

The world then moved into a floating c