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Sri Lanka buys 10 tonnes of gold from IMF

Nov 25, 2009 (LBO) - Sri Lanka has bought 10 metric tonnes of gold for 375 million US dollars from the International Monetary Fund, following in the wake of India and Mauritius, the international monetary watchdog said. The IMF said the deal was made at November 23 prices.
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Sri Lanka's central bank Governor Nivard Cabraal has said that gold would be a "very important anchor" for its foreign reserves.

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As of September 2009, Sri Lanka had reported gold holdings of 5.3 tonnes.

The IMF said its latest sale was of the 403.

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3 metric tonnes it was selling to raise money.
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It had already sold 202 tonnes to India and the Mauritius.
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IMF said it was first selling to gold "directly to central banks and other official holders" instead of to the general gold market.

Gold prices go up in terms of paper currency such as the US dollar when monetary policy of the respective central bank is loose.

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Until the creation of the Federal Reserve gold prices were about 20 dollars an ounce under a 'gold standard' for monetary policy.


The last links with gold and paper money was severed in 1971 when the United States unilaterally defaulted on the Bretton Woods agreement and suspended gold convertibility after p

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