RTTNews - Friday, Europe's nineteen central banks announced a new 400 metric tons ceiling for annual gold sales over the next five years, reducing the limit by 100 tons from the current level.
In a joint statement, the European Central Bank, the central banks of the sixteen Eurozone nations, the Swiss National Bank and Sweden's Riksbank said, Gold remains an important element of global monetary reserves.
Signatories to the Central Bank Gold Agreement agreed that their total sales would not exceed 2,000 tons over the five-years. The new programme is due to start on 27 September 2009, immediately after the end of the 2004 agreement.
The signatories also recognized the intention of the International Monetary Fund to sell 403 tons of gold and noted that such sales can be accommodated within the above ceilings.
In May 2008, the IMF's Board of Governors endorsed a new package of measures to end its over-reliance on lending income. As part of this income model reform, the IMF's membership endorsed limited gold sales, amounting to 403.3 tons, conducted under safeguards to avoid disruption of the gold market. There is no change in this proposed sale.
The Executive Board of the IMF has not taken a decision to sell gold, which requires an 85% majority of the total voting power.
Meanwhile, the Swiss National Bank said it has no plans for any further gold sales in the foreseeable future. With gold holdings amounting to 1,040 tons, it holds a substantial part of its currency reserves in the form of gold.
In the first half of the year, central banks sold 39 tons of gold, down 73% year-on-year, the London-based precious metals consultancy GFMS said.
The latest is the third agreement between the banks. The previous was in 2004, when central banks agreed that their gold sales will not exceed 500 tons annually and 2,500 tons over the five-year term. The first deal was made in 1999.
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