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Business Cyprus

Central bank has no plans to sell gold reserves: source (update 2)

Cyprus has no plan to sell gold reserves to fund its €10 billion bailout, officials at the central bank said on Friday.

Cyprus’s government in April undertook to look into selling its gold reserves to raise €400 million to help finance part of its EU-IMF bailout.

“We do not intend to sell the gold,” a senior official at the central bank told Reuters, declining to be identified.

Central Bank officials said the gold reserves, valued at €441 million on its balance sheet, were important to safeguard the institution’s independence.

Asked about any alternative method to raise the €400 million, the official said: “They (the government) have to go back to the troika and say this (a gold sale) is not going to happen.”

The official was referring to the troika of the European Union, the European Central Bank and the International Monetary Fund.

While the Cypriot government had said sales would be considered, the Central Bank had typically been cool to the idea.

The governor of the central bank would have the final say in such a sale, the central bank sources said.

Finance Minister Harris Georgiades said the raising the €400 million was a decision taken by the Eurogroup.

“I have contacted the Central Bank recently suggesting they examined alternatives,” the minister said. “But in any case the decisions and the responsibility belongs to the Central Bank.”

International lenders have flung a financial lifeline to Cyprus, which was forced to seize deposits at two major banks to finance its side of the deal in March.

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