Central Bank admits sale of gold reserves

May 4 2004


YEREVAN, MAY 4, ARMENPRESS: The Central Bank of Armenia has
confirmed today reports that it sold the country’s gold reserves of
about 1.4 tons. The Bank would not disclose the details of the deal,
which took place at the end of last year.
Today Central Bank governor, Tigran Sarkisian, said the decision
to sell the country’s gold reserves was based on an earlier decision
of the Bank that “high correlation between gold and the euro means
that even without gold in international reserves the necessary level
of diversification can be maintained and at the same time the yield
of international reserves can be raised.”
Sarkisian said gold reserves remained unchanged at around 1,396
kg, which on October 1 2003 was estimated at $17.1 million (3.65% of
Armenia’s international reserves of $468.7 million).
Dealers were instructed to sell the entire gold reserves when the
price for one ounce was $380, but the they sold it when the price
went up to $400, bringing Armenia $3 billion Drams in extra profits.
Sarkisian said the deal was very profitable, as all the raised money
went to the budget.
Sarkisian argued that gold reserves are considered as a means of
wealth accumulation, “but Armenia is not in a condition to do so, as
gold reserves yield virtually no profits and in any case Armenia will
have to pay its foreign debt in hard currency.”
Armenia’s international reserves, already without gold, totaled
$512 million on April 1 2004, while the country’s foreign debt has
amounted to over $1 billion.