(More on this issue) Reserves Management Given “negative carry,” we did not seek to accumulate reserves. We managed to keep them at a comfortable level throughout the year. In December 2011, the gross external reserves of the Bank exceeded Rs80 billion while net international reserves amounted to almost Rs110 billion, representing around 37 weeks of imports.
Our gold holdings amounted to around Rs5.7 billion as at end-December 2011, or around 7 per cent of gross external reserves. Our reserves are at a comfortable level when measured against the two traditional metrics of import cover and short-term debt cover. We actively pursued our diversification strategy into higher-yielding instruments and comparatively stable currencies.