Cyprus is resisting pressure from the European Commission (EC) and International Monetary Fund (IMF) to sell its gold reserves to finance its “bailout.”
Yesterday the Cypriot Finance Minister said that a sale of its gold reserves was not the only option under consideration to pay down its debt and that other alternatives were being considered.
Cyprus has 13.9 tonnes (c. 447,000 troy ounces) of gold reserves which are worth some 436 million euros at today’s market prices.
The international bailout imposed on Cyprus involved 10 billion euro ($13 billion) and therefore the Cypriot gold reserves are worth a mere 4.36% of the bailout.
“The possibility of selling gold is known, but only as an option,” Finance Minister Harris Georgiades told reporters. He did not elaborate on what the alternatives were according to Reuters.
The government in Cyprus may realize that in the event of Cyprus leaving the euro and returning to the Cypriot pound, their gold reserves could provide support to the fragile newly launched national currency.
The International Monetary Fund and the European Commission stipulated that Cyprus should sell its gold reserves at the time of the bailout.
“It will be considered, when the time comes, with options, or rather, all other options,” Georgiades told reporters. Asked if this meant there was a possibility of Cyprus not selling its gold, he answered: “When that time comes other options will be examined.”
At the weekend, Cypriot President Nicos Anastasiades said he hoped there would never be a need for the sovereign nation to sell its gold reserves. Anastasiades said responsibility for the issue rested with the country’s central bank.
“I want to believe there will never be such a need,” Anastasiades told a news conference in Nicosia at the weekend. “The issue is not being discussed by the government, it is a responsibility of the central bank,” he told reporters.
Full article: Cyprus resists international pressure to sell gold reserves (Resource Investor)