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Central Bank admits sale of gold reserves

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  • Central Bank admits sale of gold reserves

    ArmenPress
    May 4 2004

    CENTRAL BANK ADMITS SALE OF GOLD RESERVES

    YEREVAN, MAY 4, ARMENPRESS: The Central Bank of Armenia has
    confirmed today reports that it sold the country's gold reserves of
    about 1.4 tons. The Bank would not disclose the details of the deal,
    which took place at the end of last year.
    Today Central Bank governor, Tigran Sarkisian, said the decision
    to sell the country's gold reserves was based on an earlier decision
    of the Bank that "high correlation between gold and the euro means
    that even without gold in international reserves the necessary level
    of diversification can be maintained and at the same time the yield
    of international reserves can be raised."
    Sarkisian said gold reserves remained unchanged at around 1,396
    kg, which on October 1 2003 was estimated at $17.1 million (3.65% of
    Armenia's international reserves of $468.7 million).
    Dealers were instructed to sell the entire gold reserves when the
    price for one ounce was $380, but the they sold it when the price
    went up to $400, bringing Armenia $3 billion Drams in extra profits.
    Sarkisian said the deal was very profitable, as all the raised money
    went to the budget.
    Sarkisian argued that gold reserves are considered as a means of
    wealth accumulation, "but Armenia is not in a condition to do so, as
    gold reserves yield virtually no profits and in any case Armenia will
    have to pay its foreign debt in hard currency."
    Armenia's international reserves, already without gold, totaled
    $512 million on April 1 2004, while the country's foreign debt has
    amounted to over $1 billion.
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