Finance, Forex and Investments

Why did Reserve Bank Of India purchased 200 tonnes of gold when there are chances of high inflation rate?

Public Comments

1. It is a reserve for any country. Read Vibrant Rose in hubpages web.
2. due to forthcoming asian games and to feed the foreigner's neglecting our poor indians
3. They obtained one of the worlds' most valuable commodities in exchange for a currency that they can create at virtually no cost. It is a sensible thing to do.
4. gold reserves of a country is a serious facator dtermining the value of its currency. More gold rserve will drive up the value of the currency and helps bring down the rate of inflation. Printing of more currency dilutes it's value and creates inflation.