Sri Lanka Gold Reserves now $700mn

26th July 2010, www.dailynews.lk, Jayasiri Munasinghe

The Central Bank has been able to amass record gold reserves with the Central Bank taking steps within the past 10 months to purchase 21 metric tons of Gold - an increase from the paltry two to three tons of gold in its vaults not so long ago.

This is an unprecedented feat and a great victory according to Senior Deputy Governor of the Central Bank Dharma Dheerasinghe.

He said the value of the gold reserves currently held by the Central Bank is 700 million US dollars (Rs. 75 billion).

The Senior Deputy Governor said there was a trend showing an escalation of gold prices in the world market on a daily basis. At such a time the success of the Central Bank in raising its gold deposits was an indication of the country’s economic strength.

He also said that the Central Bank which has been successful in accumulating such a large gold reserve will at no time barter it away in a way that would be disadvantageous or unprofitable to the country.

While succeeding in expanding its gold reserve base the Central Bank has also been able to earn Rs 10 billion from its overseas investments - a special feature being that what the CB had earned from its overseas investments for the whole of last year was equalled in January alone this year. He said they expect to earn over Rs. 20 billion from overseas investments by the end of this year. The Senior Deputy Governor said by enhancing the country’s foreign reserves in this manner they have been able to cover up six months of imports.

“Two or three years ago our foreign reserves were so low we were able to meet only about two weeks of imports.Being able to rescue the country from such a situation is indeed a great victory,” he added.