Bars at the Korea Gold Exchange in Seoul, South Korea, 19 July 2019. The price of gold increased 470 won, or 0.88 percent, to 54,000 won or 46 US dollars per gram on July 18, when the Bank of Korea cut the key rate to 1.5 percent. YONHAP / EPA
Aug. 3 (Asia Today) -- The Bank of Korea is preparing to buy physical gold for the first time in 13 years, beginning with some domestically produced bullion that otherwise would have been exported.
The central bank said Monday that it has established a cooperative system with the Korea Exchange, Korea Securities Depository and domestic gold producer LS MnM. Korea Zinc is also expected to supply eligible gold.
The initiative will create a new channel for adding gold to the country's foreign exchange reserves as the central bank seeks to diversify its assets and strengthen its ability to withstand geopolitical and financial shocks.
LS MnM and Korea Zinc produce an estimated 4 to 5 metric tons of gold annually for export. The Bank of Korea plans to purchase part of that output when market and reserve-management conditions are favorable.
