Central Bank of Argentina confirms overseas gold transfer, possibly as collateral for loans
BUENOS AIRES (September 6) The Central Bank of Argentina has confirmed that portions of its gold reserves have been moved out of the country, releasing a statement that it had “completed the transfer of part of its gold reserves in its different accounts.”
As noted by the Argentinian news site Clarin, the bank released the statement amid controversy surrounding the move after it was first revealed in mid-July. At the time, the central bank sought to calm concerns regarding the move and address the requests for access to public information made by the Secretary General of the Banking Association, Sergio Palazzo.
“The Central Bank of the Argentine Republic (BCRA) successfully completed transfers of part of its gold reserves between their different accounts,” the bank said in a statement without providing specific details about the amounts transferred.
Addressing fears that the transfers would open the country's gold holdings to seizure in order to pay outstanding debts, Santiago Bausili, head of the BCRA, said that all “account rebalancing operations” were thoroughly discussed before being initiated and they are similar to previous actions taken over the past decade.
“The Organic Charter of the BCRA and Law 23,928 delegate the daily administration of reserves in this monetary authority that include not only gold, but also foreign exchange and other external assets,” the BCRA statement said. “For more than a decade, the BCRA has maintained the same administration options for its gold reserves, both in physical format (bars and ingots) and in electronic format (accounts abroad).”
The central bank also noted that the rebalancing operations “do not alter the total volume of gold reserves, which remain equivalent to approximately US $ 4,981 million as published in the balance sheet of August 23, 2024.”
The purpose of shifting the funds out of the country was so that the gold could be certified and used as collateral to obtain financing, according to one source who asked to remain anonymous. Before the move, about half of Argentina’s gold was in domestic vaults, while the other half was in London, another source said.
BCRA officials also criticized what they called “irresponsible” reports about the gold going abroad and stressed the importance of keeping activities related to the country’s gold reserves confidential.
“The BCRA expresses its concern about the irresponsible diffusion of information, for political purposes, related to these operations before their completion because it put the security of the assets of all Argentines at risk,” the central bank said in a statement on Monday. “Information on the administration of BCRA reserves has always been handled confidentially in an effort to preserve its security. Both the General Audit of the Nation and the pertinent control entities maintain access to that information under the same cloak of confidentiality.”
The controversy around Argentina’s gold movements first began in mid-July, when Plazzo revealed that the BCRA sent gold bars from its headquarters to London, noting that the move opened the reserves to being confiscated due to embargo orders by creditors of Argentina’s debt.
Analysts have suggested that the final destination for the gold reserves is the headquarters of the Bank for International Settlements (BIS) in Basel, where the country has deposited gold belonging to the BCRA for years.
If true, that would add credence to comments that the funds are safe as all assets deposited with the BIS have “sovereign immunity,” meaning they are not subject to requests for an embargo.
Luis Caputo, Minister of Economy for Argentina, said the move was a positive one “because today there is gold in the bank that is as if you had a property inside and you cannot use it at all. Instead, if you have that gold abroad, you can get a return – and the country needs to maximize the returns on its assets.”
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