Romania Now Wants To Hold All Its Gold
(Kitco News) - The Romanian government continues with its plan to pass legislation that would force the nation’s central bank to repatriate all its gold held in foreign vaults.
Romanian news outlets report that Tuesday that the government’s Budget and Finance Committee of the Chamber of Deputies released a favorable report on the proposed legislation drafted by Social Democrats Liviu Dragnea and Serban Nicolae.
However, there has been one major amendment to the bill. The proposed law would now see all the nation’s gold held in domestic vaults; the original bill allowed for 5% of its gold reserves to be held in foreign vaults.
Currently Romania holds 103.70 tonnes of gold as part of its foreign-exchange reserves. About 65%, or 67.4 tonnes, of that gold is stored with the Bank of England.
A draft bill was adopted by the Romanian Senate earlier this month and now goes to the Chamber of Deputies for a vote. However, the legislation continues to face criticism from the National Bank of Romania (BNR).
“The National Bank of Romania cannot support the legislative proposal in question in the form adopted by the Senate and cannot fully accept the proposals for amendments received from Senator Serban Nicolae,” said a senior BNR expert during a debate at the Chamber of Deputies. “I would like to point out that according to the European Central Bank, the central bank’s attribution and management of the official reserves of the member states involves taking decisions on holding, keeping, arranging, negotiating and daily management, as well as managing long-term international reserves.”
Proponents of the legislation have said that because of Romania’s stable economy, there is no reason why the government should pay to hold its gold abroad.
If the government goes forward with its plan to repatriate its gold, the country will join the ranks of other nations like Germany, Hungary, Austria and the Netherlands that have moved their holdings of the precious metal closer to home.
Gold analysts have been watching central-bank gold demand closely as official gold demand is expected to continue to support prices through 2019. 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.