European banks agree to cap gold sales at 400 tonnes
08 Aug 2009
The European Central Bank (ECB) and central banks of 18 European nations have decided to renew their five-year gold agreement and reduce the cap on gold sales at 400 tonnes a year, from 500 tonnes set earlier.
A joint statement issued by the central banks in Frankfurt yesterday said: "Gold remains an important element of global monetary reserves."
The financial institutions further agreed that all gold sales decided and to be decided will be achieved through a concerted programme of sales over the next five years, starting 27 September 2009, when the previous agreement executed in 2004, expires.
Annual sales are capped at 400 tonnes and the total sales during the 5-year period at 2,000 tonnes, bringing them down from the earlier limits of 500 tonnes a year and 2,500 tonnes in 5 years.
The central banks agreed to review the agreement after 5 years.
Regarding International Monetary Fund (IMF), which is currently not a signatory to the Central Bank Gold Agreement (CBGA), the statement said, ''The signatories recognise the intention of the IMF to sell 403 tonnes of gold and noted that such sales can be accommodated within the above ceiling."
