Gold and Foreign Exchange Reserves

Treasury written question – answered on 22nd February 2008.

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Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

To ask the Chancellor of the Exchequer how much in net ounces of gold has been sold from the foreign exchange reserves since 1997; what the net proceeds have been from those sales; and what the current value would be of the amount sold.

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

holding answer 20 February 2008

395 tonnes of gold were sold from the reserves between July 1999 and March 2002 and re-invested in interest-bearing foreign currency assets. Other central banks have adopted similar policies. The total proceeds were around $3.5 billion, equivalent to around £2.3 billion (using exchange rates at the time of the sales). On 15 February 2008, the current market value of the gold sold was around $11.5 billion, equivalent to around £5.8 billion.

The programme was part of a restructuring of the foreign currency and gold reserves aimed at achieving a better-balanced portfolio. As a result of the programme a one-off reduction in risk of approximately 30 per cent. was achieved, as measured by a type of widely used financial risk model—Value-at-Risk.

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