Philippines Central Bank Adopts Policy of Active Gold Trading
(Bloomberg) -- The Philippine central bank is shifting to active gold trading as the monetary authority seeks to better manage the country’s international reserves, Governor Benjamin Diokno said on Saturday.
The bank has moved from “passive” gold trading because of a change in the price dynamics of the metal, a new law that makes purchases of it from small miners more attractive and the country’s record-high reserves, Diokno said in a mobile-phone message to reporters.
Studies show that the optimal portfolio mix of gold to reserves should be 9.8%, while a World Bank survey suggested around 9.55%, according to Diokno. The Philippines’ ratio exceeds 10%.
The Bangko Sentral ng Pilipinas “will always be opportunistic in its reserves management,” the central bank chief said. The country posted gross international reserves of $98 billion at end-July.
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