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Originally Posted by BANFAN
We don't have trade surplus to buy dollars. Our dollar reserves have increased due to remitance. So we have dollars in reserve, now we can buy other potential currencies or bonds or commodity. It's not a bad idea to buy gold. Even if US $ falls and other currency becomes dominant, Gold value remains. India, china and many others are buying golds currently.
Two days back there was a news on CNN that Japan is worried that china is buying large amount of yen and building reserves. This could be to raise the value of yen and reduce the demand of Jap products in int markets making it costly. Thus boost chineese export.
You can do these things when you have enough safe reserves. Gold is a safe reserve by all definition. I think BB is doing the right thing. FA bhai. BB didn;t have enough money when gold was $700. It is only now that we have reached to 10 billion reserves. They need to keep 2-3 billion cash for opening L/Cs against imports. So, we hardly have 6/7 billion to buy gold. Hope we don;t have to sell it again soon.
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BB spent only 400m (As per Ntv Bangla) in US to buy 10 tons of gold at $1270 approx.
Two years ago, BB could have spent only 250m approx in US at $700.00
Two years ago, BB reserve was 6b approx in US and enough to buy this amount of gold and more.
It was not a problem with money, BB simply lacked expertise and foresightedness in decision making.