Loading ...Ukraine Central Bank Admits Gold Outflow, Calls It “Optimization Of Reserve Structure”
Tyler Durden’s pictureSubmitted by Tyler Durden on 11/24/2014 10:16 -0500
A week after we reported that the head of the Ukraine central bank admitted in an unofficial, informal interview that Ukraine’s gold is gone, all gone, moments ago the Central Bank revealed that, sure enough, the gold holdings in the civil war-torn country have tumbled, as a result of a decision in September to “increase the share of US dollars in a reserve basket”, or in other words, to sell the gold. Just don’t call it that: in fact, as of today we have a brand new buzzword for gold liquidations: “optimization of international reserves.”
From the central bank:
National Bank of Ukraine has optimized the structure of international reserves. This is due to timing structure of international reserves and the external position of the country. National Bank of Ukraine decided in September 2014 to increase the share of US dollar in a reserve basket, because the structure of the trade balance of the country is 70.3% in US dollars, 15% in euros. 77.7% of gross foreign debt denominated in Ukraine USD in EUR – 11.2% in SDR – 5.8%.
Recently, there was a significant volatility in global currency markets associated with the strengthening of the US dollar against other world currencies. Therefore, the National Bank of Ukraine decided to reduce the share of gold in foreign exchange reserves to 8%. To this end, the international markets has sold 0.46 million. Troy ounces of gold in US dollars, respectively proportion of gold in international reserves declined to 7.9%.
According to the IMF, the proportion of gold in global reserves at an average of 11.7%, while international reserves of developing countries, the proportion of gold in an average of 4.4%.
So Ukraine’s central bank decided to conver its gold into dollars just as the USD has been surging to levels not seen in years? Just who says central bankers are bad traders. Furthermore, while one assumes this is the asset update as of the end of October, we can’t wait to learn just what happened in the first days of November when the Valeria Gontareva interview took place.
And while the fate of the Swiss gold referendum may lie in the hands of the Zurich subsidiary of Diebold, perhaps it is time for Ukraine’s population to ask its “elected” rulers just where Ukraine’s gold has gone, pardon, been “optimized” to.