The Bundesbank refused on Monday to bow to pressure from the German government, which has been calling on the central bank to sell a large part of its gold reserves and use the proceeds to bring down Germany's soaring public deficit. Under a recently renewed gold agreement, signed with 14 other European central banks, the Bundesbank can sell up to 120 tonnes of gold from its gold reserves each year for the next five years.
With total gold reserves of 3,400 tonnes, the German central bank is the world's second-biggest holder of gold after the US Federal Reserve.
But the Bundesbank announced in a statement on Monday that it would make only very limited use of that option and sell only eight tonnes of gold in 2004.
The gold would be sold to the German Finance Ministry for use in its regular gold coin minting programme.
The option to sell the remaining 112 tonnes this would be observed by other national central banks in countries sharing the euro, the Bundesbank said.
Comments
Comments are closed.