FewhadexpectedIndia'sReserveBanktobethefirsttobuytheInternationalMonetaryFund'sgold.Indiahassnappedup200metrictonsofgold-nearlyhalfthepreciousmetaltheIMFissellingtoshoreupitsfinancesandincreaselendingtodevelopingcountries.TheReserveBankhaspaid$6.7billionforthegold.Theadditionof200tonsofgoldmeansthataboutsixpercentoftheReserveBank'sforeignexchangereservesarenowingold,upfromfourpercent.Thecountry'sforeignexchangereservestotaled$285billioninOctober.India'sFinanceMinister,PranabMukherjee,saysthecountry'scomfortableforeignexchangereservespromptedtheReserveBankorRBItoinvestinthepreciousmetal."NaturallyasafinanceministermyadvisetothegovernorofRBIwouldbethatifyouareinapositionkeepinginviewtheavailabilityoftheforeignexchangeyoubuythat[gold],andfromthatperspectiveithasbeenbought,"hesaid.EconomistssayIndiahasboughtgoldtodiversifyitsassetsandholdfewerdollarsatatimewhentheU.S.currencyisweakeningagainstothercurrencies.Gold,whosepriceshavesurgedinthepastyear,isseenasahedgeagainstaslumpingdollar.India,likeseveralAsiancountries,holdsrelativelylittlegoldinproportiontoitsforeignexchangereserves.India'smovetobuygoldfromtheIMFisalsoseenaspartofanefforttoassertitsgreaterroleinworldeconomicaffairs.India,alongwithChina,hasbeenlobbyingforlargerrepresentationintheIMF,andhaspromisedtoaugmentitsresourcesforlendingtodevelopingcountries.ThereisspeculationthatotherCentralBanks,includingtheChina's,wouldbuytherestofthegoldtheIMFplanstosell.Infact,India'sgoldpurchaseisreminiscentofanotheryearwhentheyellowmetaldominatedheadlinesinthecountry.In1991,dwindlingforeignexchangereservesforcedNewDelhitouseitsgoldreservestoraisealoantopayitsinternationaldebt.ThepaymentcrisismarkedaturningpointforIndia'seconomyasitpromptedthegovernmenttoreversedecadesofclosed-door,socialiststyleeconomicpolicies.EconomistssayIndia'spurchaseof200tonsofgoldshowsthatthecountryhascomealongwayinthetwodecadessinceitwasonthevergeofdefaultingonitsinternationaldebt.IndiaisAsia'sthirdlargesteconomy,anditwaslessaffectedbytheglobalfinancialcrisiscomparedtoWesterncountries.
