CHENNAI (Commodity Online): Following India’s decision to buy 200 tonnes of IMF gold, other central banks have also shown interest in diversifying their reserves by investing in gold.

After the Reserve Bank of India’s buying of the IMF gold, Sri Lanka’s central bank has also announced that it will also diversify its reserves as the currency market is very volatile.
 
Sri Lanka’s Central Bank assistant governor Nandalal Weerasinghe however refused to confirm rumours that the bank had purchased around five tonnes of gold.

 “We have been observing that prices of gold have been going up so we have been strategically buying gold over the past several months as part of a reserve management process of diversifying our portfolio,” he said.

The price of gold hit a record high above $1,100 an ounce in London trading on Friday following a report that Sri Lanka had joined India in purchasing the precious metal.

Weerasinghe did not disclose from which sources the bank was buying the gold or at what prices.

However, media reports said that the central bank’s gold purchases were part of moves to smooth periods of dollar volatility and the amount bought was around 5.3 tonnes by September.