Cyprus Denies Gold Sell-off Plan

Despite a deep economic crisis and reliance on international loans to stay afloat, Cyprus has no plan to sell gold reserves to pay the 10 billion euros ($13.75 billion) it is borrowing, central bank officials said on Dec. 13.

The notion was first discussed in April, a month after then newly-elected President Nicos Anastasiades asked the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) for the aid that came with harsh conditions, including confiscating 47.5 percent of accounts in state banks of more than 100,000 euros ($137,000).

The government at the time said it could raise 400 million euros ($549 million) to help defray the cost but the idea drew some fierce resistance. Now it has been rejected again.

“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 euros ($605.6 million) on its balance sheet, were important to safeguard the institution’s independence and maintain integrity in the banking system that was shaken by the deposit seizures and ongoing capital controls limiting how much account holders can withdraw.

Asked about any alternative method to raise the 400 million euros, 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 governor of the central bank, not Anastasiades, would have the final say in such a sale, the central bank sources said.