In a move that had the world sit up and take notice, the Reserve Bank of India (RBI) purchased 200 tonnes of gold from the IMF for around $7 billion. Reportedly, this was done to diversify the country's foreign exchange reserves totaling $285.5 billion.
Though in a portfolio that even today consists largely of US treasuries, a $7 billion infusion of gold can hardly be called diversification, the fact remains that central banks across the world as also other international investors are stacking up on gold. And this is essentially because the world is fast losing its trust in the dollar.
Text: AN Shanbag
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