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JOHANNESBURG (Reuters) - The central bank in South Africa -- the world's
largest producer of gold -- might increase its gold reserves, its head said
on Monday, but gave few details.
"As part of our reviews on composition of our gold holdings, we may even consider increasing our gold holdings," Reserve Bank Governor Tito Mboweni said in a prepared text of a speech at a precious metals conference in Johannesburg.
During delivery of the speech, he excluded those comments, but made other less specific comments during a question period.
In response to a question, Mboweni noted that the central bank has been increasing its foreign exchange reserves at a measured pace and there was no reason why it could not boost gold holdings.
"I don't see why we can't," he said, adding that South Africa would not be interested in increasing gold holdings to the high levels of China or Japan.
For the last several years the bank has held a stable level of around 4 million fine ounces of gold in its foreign reserves, which in financial terms accounted for around 10 percent of total gross reserves of $19.69 billion at the end of October.
South Africa has boosted its gross reserves, mainly by a steady buying of dollars, from $13.01 billion at end-October 2004.
"The central bank is very comfortable holding these gold reserves because of the metal's war-chest qualities, because gold is no-one's liability and because it allows prudent diversification in the bank's total reserves," Mboweni said in the text of the speech
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