Gold should form an essential part of central banks’ liquidity portfolio

natalie-dempster

One of the key reasons for central banks holding reserves is to avoid a disorderly depreciation of their currencies in times of market stress.

Because of this, reserve managers must hold part of their portfolio in liquid assets in order to raise funds to help stave off such a depreciation.

This needs to be invested in high-quality assets that can be readily sold, swapped or used as collateral to raise cash in times of market stress or particularly challenging financial and economic

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