“Central Banks Buying Gold: De-dollarization Actions and the Rise of Gold Purchases”

Jakarta, CNBC Indonesia – The de-dollarization actions carried out by several world countries made Central Banks start buying gold. In fact, the number reached 228 tons.

Central banks in various countries have also reduced the portion of dollars in their foreign exchange reserves, instead, gold has been bought up since last year. The wholesale action will continue in the first quarter of 2023.

The World Gold Council last Friday reported that central banks in various countries bought up 228.4 tons of gold in the first quarter of 2023. This purchase shot up 176% compared to the first quarter of last year, when the Russia-Ukraine war only erupted in February 2022.

The purchase was also the biggest record in the first quarter, compared to previous years.

“(The purchase) is impressive, considering that last year there was a record demand,” wrote the World Gold Council.

Singapore’s central bank reportedly bought up 69 tonnes of gold, followed by China’s 58 tonnes, Turkey’s 30 tonnes and India’s 7 tonnes. Meanwhile, the share of the US dollar in foreign exchange reserves continued to decline.

In the Currency Composition of Official Foreign Exchange Reserve (COVER) data from the IMF, the value of the US dollar in global foreign exchange reserves has indeed decreased drastically.

In the fourth quarter of 2021, the value reached US$ 7,085.01 billion, while in the fourth quarter of 2022 it was US$ 6,471.28 billion.

In terms of share, in 2021 it will be 58.8%, while in 2022 it will drop to 58.4%. This share is the lowest in the last 27 years. In the early 200s, the share of the US dollar in global reserves was still over 70%.

(dad/ha)