The Dutch Central Bank has shifted more than a quarter of its gold reserves held in the US and Canada to the UK, citing concerns about geopolitical unrest.
Between March and August, approximately 86 tonnes of gold out of the nearly 313 tonnes in those two countries, was transferred from New York and Ottawa to London. As a result, the UK capital now holds the largest share of the Dutch gold reserves.
“With this relocation, we have improved the tradability of our gold reserves,” Dutch Central Bank Governor Olaf Sleijpen said in a statement Wednesday. “We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness.”
Due to “increasing geopolitical unrest”, the bank is working on strengthening its crisis preparedness, it said. The shift to London is aimed at improving how quickly the gold can be deployed in crisis situations.
Central bank gold in London is stored in the Bank of England, which holds bullion worth more than US$780 billion (RM3.15 billion) for other monetary institutions, as well as selected commercial providers.
That pile of precious metal helps underpin London’s position as the world’s most liquid bullion market, where hundreds of billions of dollars of bullion changes hands every week. That makes it easy for central banks to quickly sell or add to their reserves, as well as lend out metal as collateral to raise dollars.
The Dutch move comes just months after the French central bank sold its bullion reserves held in the US and replaced them with reserves in Paris, an operation it said was intended to bring its gold bars into line with international standards.
Source: Theedgemalaysia