The first CBGA was signed in 1999 to coordinate the planned gold sales of the various central banks. At the time of its introduction, the agreement contributed to balanced conditions in the gold market by offering transparency on the intentions of the signatories. It was renewed three times in 2004, 2009 and 2014 and gradually moved towards less stringent conditions. “The independence of the Central Bank is enshrined in law in many countries and central bankers tend to be independent thinkers. It is worth wondering why such a large group of them decided to join this very unusual agreement. At the same time, thanks to our close contacts with central banks, the Council has learned that some of the largest holders have been concerned for some time about the impact of unfounded rumours on the price of gold – and therefore on the value of their gold reserves – and on the use of official gold for speculative purposes. The Contracting Parties no longer see the need for a new agreement. “Since 1999, the global gold market has undergone considerable changes in terms of duration, liquidity and investor base,” the ECB said. The price of gold has also risen significantly since 1999. In addition, central banks have not sold significant amounts of gold in the last ten years, so the volume of contracts is far from exhausted (see chart). A stable economic environment is necessary for the proper functioning of the internal market and increased investment, growth and employment, and is therefore in the interest of all Member States. The internal market must not be compromised by real exchange rate differentials or excessive nominal exchange rate fluctuations between the euro and other EU currencies, which would disrupt trade flows between Member States.

In addition, Article 124 of the Treaty establishing the European Community obliges each Member State to treat its exchange rate policy as a matter of common interest; The World Gold Council welcomes the decision of European central banks to agree on a new bank-gold agreement (CBGA). The agreement, the fourth of its kind, marks an ongoing commitment by some of the world`s largest holders of gold reserves to preserve the clarity and transparency that this agreement offers to gold market participants. It also reaffirms the importance of gold as an asset in the world`s currency reserves. Gold sales already decided and decided by the signatory institutions are carried out through a concerted sales programme over five years, starting on 27 September 2004, immediately after the end of the previous agreement. Annual sales will not exceed 500 tons and total sales during this period will not exceed 2,500 tons. Sales of gold under gold agreements concluded by central banks (tonnes) Financing operations under these facilities are carried out in the form of spot sales and purchases of participating currencies, which give rise to corresponding exposures and liabilities in the creditor`s currency between the ECB and the participating NCBs outside the euro area. The valuation date of the financing operations must be the same as the value date of the intervention on the market. The ECB shall keep a register of all transactions carried out under these facilities. This provision shall apply without prejudice to other forms of transaction agreed between the central banks of creditors and debtors. Last year, central banks bought 651 tons of gold worth nearly $30 billion, according to figures from the World Gold Council – most of them for half a century. .

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