Central Bank defends investment in Greek bonds
Central Bank stated that the returns generated by reserve management activities in 2011 was US $430 after making provision for losses in Greek Bonds as well.
With particular reference to Greek investments, the Central Bank wishes to state, that at the time the Greek investments were being done, Greece had the backing of the European Financial Stability Fund (EFSF) which had a AAA rating and therefore, Greek Bonds were considered sound even though the Greece rating itself was lower than the investment rate. The investments in Greece Bonds were a small fraction of the Central Bank total Europe portfolio and the loss of the Greek bonds was comfortably offset by higher returns from other investments.
The Central Bank also wishes to state that in a wide portfolio which includes inter alia, US dollars, Euro, Japanese Yen, Australian Dollars, Sterling Pounds and Gold as well as different types of instruments such as fixed income, money market and treasuries, there are fluctuations that occur in real-time. Whilst such fluctuations pose significant challenges to all reserve managers, the Central Bank has been able to deliver higher than average returns and consistent enhancement of value of its reserves in the past and it is confident that it can do so in the future as well, in keeping with its policy guide lines. In that context, the alarmist, and one sided reports which were obviously designed to discredit the Central Bank and generate feelings of uncertainty within the economy are highly regrettable.