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Bangladesh splurges on IMF gold
Across South Asia, affluent families have long hoarded gold, viewed as the safest asset in turbulent times - and the right gift on an auspicious occasion. Brides are sent off to their grooms decked in gold jewellery that serves both as decoration, and a future safety net. Gold, people think, is more likely to hold its value than mere cash.
Now Bangladesh, one of the regions poorest countries, has bought gold from the IMF, to hedge against currency volatility.
Bangladesh Bank, the countrys central bank, spent $403m to buy 10 tons of gold from a 403 ton stock that the IMF - one of the worlds biggest official gold-holders - was releasing to raise money to step up lending to poorer countries.
That puts on Bangaldesh on the same path that India and Sri Lanka trod last year.
The acquisition pales in comparison to the 200 tons purchased by the Reserve Bank of India last year, but is nevertheless being seen by markets as a signal of Asian countries renewed appetite for the metal, which is priced within sight of its all-time high price of $1,264 set in June.
But for Bangladesh - once derided as an economic basket-case, the acquisition also reflects the way it has managed to prosper during the economic crisis, thanks to its resilient garment exports and strong foreign exchanges remittances from citizens working overseas.
Bangladesh still has plenty of challenges ahead, mainly in raising state revenues for investment in infrastructure, which has emerged as a major bottleneck to its growth. Still, after nearly doubling in a year, Bangladeshs foreign currency reserves in November 2009 hit $10bn, or nearly 5 month of imports, a fifteen-year high.
And that, for now, seems reason enough to celebrate.
Bangladesh splurges on IMF gold | beyondbrics | FT.com
Now FT also says the same the thing i have said and u laughed.
http://www.defence.pk/forums/bangladesh-defence/72341-imf-sells-10-tonnes-gold-bangladesh.html#post1130815