The UAE Central Bank’s gold reserves have jumped by more than half in less than six months to around 8.9 billion UAE dirhams ($2.4 billion).
Between March and August this year, the value of bullion assets held by the bank climbed by 51 percent, from 5.9 billion dirhams to 8.987 billion dirhams, according to the latest data released by the apex bank.
Bullion assets have also more than doubled in value since December 2019, when holdings were estimated to be worth around 4 billion dirhams ($1 billion).
Central banks around the world have been stockpiling gold in recent years, with 2019 alone recording an additional 650 tonnes added to reserves, according to the World Gold Council (WGC).
Central banks have also accumulated between 200 tonnes and 300 tonnes of gold from January to August, further reinforcing the view that the bullion’s attractiveness tends to be strong during times of economic uncertainty.
In the 2020 Central Bank Gold Reserve Survey, 20 percent of central banks said they intend to increase their gold reserves over the next 12 months, compared to 8 percent of respondents in the 2019 survey.
The majority of central banks (88 percent) said that negative interest rates, which are expected to stay near zero for the foreseeable future due to the coronavirus pandemic, are a relevant factor for their reserve management decisions, according to the survey conducted by WGC.
The latest statistics also showed that the central bank’s foreign assets dropped from around 20.5 billion dirhams in March to 6.653 billion dirhams in August.
Its foreign securities totalled 12.6 billion dirhams in August, down slightly from 12.7 billion dirhams in March.
The central bank had earlier rolled out a stimulus package worth 256 billion dirhams to support the UAE economy during the coronavirus pandemic.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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