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Central bank of Argentina confirms moving gold abroad amid criticism

GrafaGrafa2024/09/05 05:05
By:Mahathir Bayena

The Central Bank of Argentina has confirmed that it has moved some of the country’s gold reserves abroad, a decision that has drawn criticism from lawmakers concerned about the security of these assets.

In a press release, the bank explained that it conducted a “recalibration operation” to redistribute gold among its accounts, but emphasised that the total amount of gold held—nearly $5 billion—remains unchanged.

The decision to move the gold, reportedly to London, has caused unease among some Argentine lawmakers.

They fear that the gold could be vulnerable to seizure under a judicial embargo favoring holders of Argentine debt.

The Central Bank dismissed these concerns as “irresponsible,” suggesting that the statements were politically motivated and could undermine the security of Argentina’s assets.

While the Central Bank has not specified the exact reason for moving the gold, a Bloomberg report, citing people familiar with the matter, suggested that the move could be part of a strategy to have the reserves financially certified.

This has led to speculation that President Milei might be considering using the gold as collateral to secure new financing for Argentina.

Economy Minister Luis Caputo, who has supported moving gold abroad in the past, argued that holding gold outside the country could be more advantageous.

“Today there is gold in the bank, which is like having a property inside and you cannot use it for anything.

On the other hand, if you have that gold outside, you can get a return on it, and the country needs to maximise the returns on its assets,” Caputo said.

The move has sparked a debate about the balance between keeping assets secure and finding ways to generate returns for the financially troubled nation.

As Argentina faces economic challenges, how the government and the Central Bank manage the country’s gold reserves will continue to be closely watched.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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