The Contemporary Role of Gold in Central Banks' Balance Sheets

Iveta Polaskova, Lubos Komarek and Michal Skoda

Research and Policy Notes from Czech National Bank, Research and Statistics Department

Abstract: This paper is devoted to the monetary policy context of gold in central banks' reserves. It examines the correlation between the nominal and real price of gold and selected macroeconomic variables and financial assets over the financial and business cycles. In this context, it analyses the investment diversification opportunity that gold offers central banks and other investors. The paper also highlights differences in gold holdings between the central banks of advanced economies (including those with reserve currencies) and those of emerging market and developing economies. It goes on to outline the history of gold holdings from the establishment of the independent Czechoslovakia at the end of 1918 to the present day. It concludes by presenting the rationale for the position of the CNB, which ranks among the modern central banks holding minimal amounts of reserve gold.

Keywords: Central bank; gold; international monetary system; international reserves (search for similar items in EconPapers)
JEL-codes: E42 E58 F33 Q31 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac, nep-mon and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:cnb:rpnrpn:2019/01

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