You are here
Pakistan rejects IMF's call to sell its gold reserves for FX cash
Pakistan Refuses to Sell Gold Worth $2.7 Billion, IMF Says
By Shahbaz Rana
The Express Tribune
Karachi, Pakistan
Saturday, March 29, 2014
http://tribune.com.pk/story/688588/turn-down-pakistan-refuses-to-sell-go...
ISLAMABAD, Pakistan -- Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, the global lender's report revealed Friday.
The report, prepared by IMF staff led by its Washington-based mission chief to Islamabad, Jeffrey Franks, also spills the beans on the "$1.5 billion gift" to Pakistan by "Saudi Arabia" -- the name Prime Minister Nawaz Sharif's government has so far refused to officially share with parliament.
According to the report, the State Bank of Pakistan holds more than 2 million troy ounces of monetary gold, having $2.7 billion of value at the market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the State Bank of Pakistan, the IMF says.
... Dispatch continues below ...
Buy metals at GoldMoney and enjoy international storage
GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit:
http://www.goldmoney.com/?gmrefcode=gata
The IMF and Pakistan authorities discussed what steps would be needed to make the gold more liquid, the report adds. "However, the (Pakistani) authorities stressed that they have no plans to sell gold and preferred existing arrangements for gold holdings for national security reasons."
The IMF is pushing Pakistan to sell gold holdings at a time when other countries are buying the commodity as a strategic reserve. The IMF had even sold its surplus gold to India a couple of years ago.
According to analysts, one reason behind the IMF's insistence could be the country's inability to build official foreign currency reserves despite being in the $6.7 billion IMF arrangement.
While the IMF hinted in its report that the State Bank of Pakistan was not aggressive in building foreign currency reserves, it disclosed that Pakistan's central bank continued its efforts to build reserves by purchasing dollars from the market.
The State Bank of Pakistan purchased $575 million in the last few months till March 17, the report states. The purchases may help stabilise the foreign currency reserves but are considered one of the reasons behind depreciation of the local currency against the US dollar. The rupee started appreciating only after the $1.5 billion grant from Saudi Arabia.
While the federal government remains reluctant to officially disclose the name of the country that "gifted" Pakistan $1.5 billion, despite the persistent demand of the opposition, the IMF report identifies it as Saudi Arabia.
A "$750 million grant recently received from Saudi Arabia" will help the Pakistani government in reducing borrowings from the State Bank of Pakistan for budget financing, the IMF said.
"Reserve accumulation was also aided by an additional inflow of $750 million from Saudi Arabia," according to Memorandum of Economic and Financial Policies, which is attached with the report and is jointly prepared by Pakistan and the IMF.
In a footnote to the memorandum, Pakistan told the IMF that it received an initial inflow of $750 million on February 19, indicating that it would receive more money.
The IMF confirmed its recent forecast of 3.1 per cent growth this year, which was revised up from an earlier 2.8 per cent. "The overall economic situation in Pakistan is gradually improving," said Jeffrey Franks.
"That 3.1 per cent may still be a bit on the conservative side, so we see indicators of growth that are relatively strong considering the fiscal adjustment that has taken place," he told reporters on a conference call.
For the 2014-15 fiscal year, the IMF expected Pakistan's growth to accelerate to around 3.7 percent.
The IMF report said the growth was boosted by a stronger manufacturing industry thanks to an easing of Pakistan's chronic electricity shortages, despite weaknesses in agriculture.
It also said that Prime Minister Nawaz Sharif's government, despite its commitment to IMF-backed reforms, faced "strong" political resistance to certain structural measures.
* * *
Join GATA here:
Porter Stansberry Natural Resources Conference
AT&T Performing Arts Center
Margot and Bill Winspear Opera House
2403 Flora St., Dallas, Texas
Saturday, May 31, 2014
Committee for Monetary Research and Education
Spring Dinner Meeting
Union League Club, New York City
Thursday, May 22, 2014
http://www.cmre.org/news/spring-meeting-2014/
Canadian Investor Conference 2014
Vancouver Convention Centre West
1055 Canada Place, Vancouver, British Columbia
Sunday and Monday, June 1 and 2, 2014
http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc...
* * *
Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:
http://www.goldrush21.com/order.html
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
Silver mining stock report for 2014 comes with 1-ounce silver round
Future Money Trends is offering a special 18-page silver mining stock report about how to profit with the monetary and industrial metal in 2014, and it comes with a free 1-ounce silver round. Proceeds from the report's sales are shared with the Gold Anti-Trust Action Committee to support its efforts to expose manipulation in the monetary metals markets. To learn about this report, please visit:
