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BNR: We can not support the legislative proposal on repatriation of gold

Adrian Dumitrescu, senior expert at the National Bank of Romania (BNR), stated during the debates in the Budget, Finance and Banking Commission of the Chamber of Deputies that BNR cannot back the bill which provides the repatriation of 91.5% of gold reserves from abroad.

The BNR expert said that any initiative of amending the law on BNR functioning supposed consulting the Central European Bank (CEB).

“The BNR stand is that BNR cannot back the legislative proposal in discussion in the form adopted in Senate and cannot accept all amendment suggestions received from senator Serban Nicolae. According to European law, any initiative to amend law 312 on BNR statute supposed consulting the Central European Bank before adopting the legislative proposal  by Parliament, so that the approval of that institution could be taken into consideration. According to CEB, the attribution of central banks about holding and managing official reserves of member states involved making decisions on holding, preserving , negotiating and daily administration, as well as long term administration of international reserves. CEB pointed out that central national banks enjoy independence about all actions of holding and administering international reserves,” the BNR representative declared.

“CEB also defines holding and managing official reserves of member states as a fundamental mission to be carried out by national banks which are part of the European central banks. This statement of the European treaty imposes the preservation with the central bank of the competence to make decisions about the use of active stock of central national banks,”Adrian Dumitrescu added.

The Budget, finance and banks commission of the Chamber of Deputies voted a favorable report with amendments on the bill initiated by Liviu Dragnea and Serban Nicolae, which stipulates that BNR should repatriate 91.5% of the gold deposited by Romania abroad, which weighs  56 tons.

The commission also voted an amendment which in case of crisis which could endanger monetary stability, inflation target or macroeconomic policies , BNR informs the Parliament and Government in no later than 20 days.

“The initial suggestion of the bill, to set up Romania's gold reserve only on Romanian land and that BNR should inform the Parliament and Government in 20 days in case there are crisis situations that could endanger monetary stability, inflation target and macroeconomic policies,”PSD deputy Serban Nicolae declared.

The Senate adopted the bill.

At present, Romania has gold reserves of about 103.7 tons (103,697 kg and 790 g) of fine gold, representing 9-10%  of the country's international reserves. The reserve gold has been the same since 2007 to the present day, and its value grew from 1.6 billion euro in 2007 to 3.7 billion euro in 2018. About 60%, over 61.2 tons, is deposited with the Bank of England, but is in the custody of BNR, which means the Bank of England cannot make any operations with Romania's gold.

The bill suggests that Romania preserved gold reserves abroad of 5.185 tons, and the repatriation should be of over 56 tons, that is 91.5% of the present quantity held abroad.

The Senate adopted the bill which will then go to the Chamber of Deputies.