This chapter reproduced courtesy of the World Gold Council was first published by Central Banking Publications in their annual RBS Reserve Management Trends in April 2012. The chapter aims to help address the question of how much gold emerging market central banks should be holding from a domestic currency perspective. This study examines the performance of a typical central bank portfolio when denonominated in nine emerging market currencies and finds that gold’s stability across a range of currencies supports higher optimal gold allocations.
RBS Reserve Management Trends 2012: Optimal gold allocation for emerging-market central banks
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