New Delhi, Oct.25(HS): The Reserve Bank of India (RBI) is thinking of selling gold from its reserves for the first time in 30 years. From this point, it seems that the Reserve Bank has accepted the recommendations of the Jalan Committee.
Jalan committee had said that the Reserve Bank should trade gold. After this, the Reserve Bank has become active in gold trading from August this year. According to the recommendations of this committee, if the RBI earns more than the limit set in gold trading, it can be distributed to the Modi government.
The RBI has sold a total of $ 1.15 billion in gold so far. An analysis of the Reserve Bank’s weekly data showed that it has bought $ 5.1 billion of gold since the beginning of its business year i.e. July 2019 and sold about $ 1.15 billion.
The RBI had 1.987 million ounces of gold as of the end of August, On October 11, Forex reserves had the gold equivalent to $ 26.7 billion. When the Reserve Bank of India has decided to accept the recommendations of the Jalan Committee, since then it has started trading gold in an active manner.
The Jalan committee’s recommendation states that the RBI should not share the valuation gain in gold but should share profits with the government from its trading. The Jalan committee was formed last year after the uproar over the talk of sharing additional revenue of the Reserve Bank to meet the government’s revenue shortfall.
The value of the last week of the month has not been included in the Reserve Bank of India’s data. If we talk according to the report of RBI for the year 2018-19, then the price of gold is estimated on the last business day of every month. This is 90% of the price fixed by the London Bullion Market Association (LBMA) for the month. Accordingly, the value of gold in forex reserves varies only in the last week of the month. According to experts in the commodity market, gold stock in forex reserves is estimated once a month, the change in the value of gold in the middle week can be due to the buying and selling of gold.
