YEREVAN, November 16. /ARKA/. We do not rule out the possibility of restoring Armenia’s gold reserve, the chairman of the Central Bank Arthur Javadyan said today in the parliament.
In late 2003 the Central Bank made a strategic decision not to use gold in its external gross reserves and sold 1.4 tons of gold for $17 million. The move was explained by ‘the high liquidity on the gold market over the past few years.’
The Central Bank said at that time that ‘the 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.”
Javadyan said today Armenia has no gold reserves now, however, the government had completed negotiations with a major refining company on building a plant in Armenia.
“In all likelihood next year we can offer banking gold, which will allow our jewelry companies to process gold in Armenia. In this situation, it would be a sin not to restore the country’s reserves of gold,” he said.
Earlier this year Javadyan’s deputy Nerses Yeritsyan said given the current prices of gold Armenia’s Central Bank was not going to buy it from international markets.
In 2004 the Central Bank converted the proceeds raised from the sale of gold reserves to pounds. After the pound gained 8.4% against the US dollar, the Central Bank’s real return was about 13%, while the return on investment in gold could reach a maximum of 9%, solely due to an increase in gold price.
The net income from the sale of Armenia’s gold reserves amounted to 3 billion Armenian drams. The entire gold reserve sold at more than $400 per troy ounce.
According to the Central Bank, Armenia’s gross foreign exchange reserves in late August 2015 stood at $1.646 billion, a 3.3% decline from the previous month. ($1 – 481.88 drams). –0–
