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Colombia's gold reserves are valued at less than $ 1 billion

13 October 2020

 

Despite the fact that during the last two months the Banco de la República has increased the nation's gold reserves, the reserves as of August 2020 were valued at $ 983,617 million.

 

Gold reserves function as international reserves in case the country needs access to resources for an emergency, such as a pandemic.Months ago there was controversy because the Banco de la República sold two-thirds of its gold reserves a few weeks before the price of the metal reached all-time highs. Precisely, the Issuer sold about $ 1.7 trillion in June, raising reserves from $ 2.6 trillion to $ 891,669 million.

 

The Banco de la República explained that the participation of gold in international reserves is minimal and that the time at which the sale took place was favorable because its price had been rising for several months and warned that "it does not speculate."

 

Read also: Banco de la República slightly expanded its gold reserves againWith sales made between May 27 and June 26, 2020, the share of gold in international reserves was further reduced from1.40% of the total to 0.45%. The average selling price was US $ 1,727 per ounce, ”said Banco de la República.

 

On the criticism received for selling part of the gold reserves, the general manager of the Banco de la República, Juan José Echavarría, said that the function of the Issuer is not to speculate on prices as normal investors do, which is why he justified the operation."In this process, the Bank does not assume speculative positions around the prices of private assets, but builds a diversified portfolio that meets the management criteria explained above," said Echavarría.Some analysts also justified and supported the decision taken by the Colombian central bank.

 

"Profitability would be the last thing I would worry about in those investments. The stick to evaluate the management of the international reserves of the Banco de la República cannot be the same that we apply to the management of other portfolios ", said the former vice-president of Anif, Nelson Veran on the sale made by the Issuer.

 

According to the Banco de la República, the reserve management policy is based on periodic portfolio rules and adjustments and it is this policy that has allowed the Nation to obtain “significant returns” from its reserves in an international context of interest rate reductions.

 

 

Source: https://www.dinero.com/inversionistas/articulo/cuantas-reservas-de-oro-tiene-colombia/302940