BNR’s Isarescu: Negative news about the gold reserves in London have harmed the country and the central bank

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The advantage of keeping an international reserve lies in reducing the financing costs and offering Romania’s credibility for other states, and the negative news about it has harmed the country, National Bank of Romania (BNR) Governor Mugur Isarescu said on Friday.

“The great advantage of maintaining an international reserve is to give credibility and reduce financing costs. So, instead of costing you 6% when borrowing from abroad, it costs only 4%, as we do now. And that’s the gain. It is large! Especially because we have a substantial external debt,” said Mugur Isărescu, during the “Cristian Popişteanu Symposium”, with the theme “The BNR Treasure evacuated to Moscow – a historiographical review and a case study”.

The Governor added that the purpose of keeping the gold reserve abroad is not to collect interest. “The interest rate for gold is usually small or zero, about one-sixth, as historical average of the interest of a foreign currency deposit in euros or dollars,” Isarescu said.

The Governor pointed to the “avalanche of negative news about our placement in London”, which “has done much harm to the country” and has harmed both the credibility of the BNR and the country, Isarescu said, arguing that keeping all gold in Romania does not bring any advantage.

“It is good that he was at least seen and the world knows we have 100 tons of gold. Otherwise this question mark might appear. Should we invite each foreign investor to the National Bank and during the visit programme we pass through the Treasury to touch the gold, to see it? Even so, he won’t believe, because, being in London, the gold is certified from the point of view of purity, weight, authenticity,” Isarescu explained.

The Romanian Parliament recently adopted the legislative draft initiated by Liviu Dragnea and Serban Nicolae, which stipulates that the National Bank will repatriate 91.5% of the gold deposited abroad.

 

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