April 24, 2019 / 1:54 PM / a month ago

Romanian parliament votes to bring gold reserves back from Bank of England

BUCHAREST, April 24 (Reuters) - Romania’s parliament on Wednesday approved a bill requiring the central bank to bring the bulk of its gold reserves back from the Bank of England, a move that the ruling party said was aimed at cutting costs but that critics decried as populism.

Romania has kept gold reserves at the Bank of England for well over 100 years, although the exact amount has fluctuated greatly, even dropping to zero in 1989 when dictator Nicolae Ceausescu used the gold to pay off the country’s external debt.

The ruling Social Democrats (PSD), recently at odds with the central bank over a new tax on banking assets, say the state coffers have not benefited from storing gold abroad, however, and instead have had to pay storage fees.

The central bank says it has only been paying about 300,000 lei ($71,000) annually in such fees.

It says keeping gold abroad means Romania has readily available reserves for use as financing collateral in the event of a crisis.

Of Romania’s overall gold reserves of about 103.7 tonnes, about 61 tonnes is kept at the Bank of England - the world’s second-largest custodian of gold after the New York Federal Reserve.

“As you keep your jewels at home, you do not keep them at your neighbours, nor do you pay any fee to store them ... Romania can afford to keep it on its territory safely and no longer pay rent,” Serban Nicolae, one of the bill’s co-authors, told reporters.

Under the bill, the central bank would need to comply with a requirement to keep no more than 5 percent of its gold reserves abroad, meaning about 56 tonnes would need to be repatriated.

No Brexit-related concerns have been mentioned.

The bill was endorsed by 165 votes to 90 in the assembly. The centrist opposition said it would challenge the move in the constitutional court. ($1 = 4.2415 lei) (Reporting by Radu Marinas; Editing by Hugh Lawson)

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