Romania Proposes to Repatriate 95% Of Its Gold
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According to international reports, Romania is the latest nation that wants its gold back. Romania's Social Democrat Party (PSD) leader Liviu Dragnea and PSD senator Serban Nicolae have proposed legislation that requires the National Bank of Romania (BNR) to hold most of its gold reserves domestically.
A description of the bill posted on the Senate’s website said: "The National Bank of Romania can deposit gold from the established reserve abroad exclusively for the purpose of obtaining income through trading and other specific operations. The gold deposited by the National Bank of Romania abroad cannot exceed 5% of the total gold reserve.”
While the central bank does keep some gold in its vaults in Bucharest, the majority of gold is held in the United Kingdom with the Bank of England.
The proposed legislation has been filed for debate in the Senate under urgent procedure.
“Nothing in Romania’s economic situation justifies keeping such a quantity of gold as a reserve abroad, with the associated costs, which are not to be neglected, when this reserve can be kept and supplemented, accordingly, in deposits in the country,” Dragnea and Nicolae said in statements to the media.
However, the central bank governor Mugur Isarescu has pushed back on the proposed legislation. “I have been accused that I keep the reserves abroad. As if I am the one to keep them, as if they were mine. Where do you want us to keep them? These are international reserves; do you think the euros and the dollars are kept in BNR's basement? They are kept in reserves,” he was quoted as saying by local media.
Currently, the BNR holds 103 tonnes of gold in its reserves, valued at $3.84 billion.
Some commodity analysts have pushed back on the idea of central banks repatriating their gold — a theme that has been gaining traction for the last five years. While the concept is patriotic, analysts have noted that moving gold away from key market hubs like New York and London can create logistical problems if that precious metal ever needs to be monetized.
Romania’s move comes after an active year for central banks in the gold market. According to the World Gold Council, central banks collectively bought 651.5 tonnes of gold in 2018, the most purchases in more than 50 years.