Karen Molina negocios@eldiariodehoy.com
Tuesday, April 28, 2015
The Central Reserve Bank (BCR) reported yesterday that the $ 206 million obtained from the sale of the 5,412 tonnes of gold were invested in certificates of deposit, deposit and commercial papers abroad and their buyers were international bank issuers with a a credit rating of A- whose names were not disclosed.
However, the sale has generated suspicions about the motive that led to the financial institution to make that decision.
Internet an article published by the site Mining.com asks what is behind the sale of this gold and links the operation of international dispute that the Salvadoran state has with the mining company Pacific Rim in Washington.
This Canadian company requires the State compensation of $ 301 million for initiating exploration of gold deposits in the country without the ability to exploit them. The failure of this litigation has not yet been defined.
However, the note makes no direct connection on the sale of gold and commitment that will require an expense to the state.
In another article published by centralbanking.com note sale is also resumes explaining the strategy used by the government to sell the gold was not a usual strategy as it has done regularly since 2011 when the most significant sale occurred gold, in the government of former President Antonio Saca.
Since then the government has only made two sales: a minimum of just a fraction of a ton in December 2014 and now, in March, when it sold 80% of its reserves.
Suspicions have grown even more after it became known that the government will ask the Legislature for permission to issue $ 900 million in debt, as part of a liquidity problem that is combined with low incomes that the Ministry of Finance has reported recent months.
State data indicates that the Government is urged to get more money to fund their programs and providing more resources to key institutions such as the National Civil Police, which faces a serious security crisis.
The Central Bank, meanwhile, reported that the sale of this gold is a safe measure to the volatility of gold in recent months and in no way affects international reserves.
According to international market prices going down and gold is constantly rising in price and in step with the changes that is taking the US dollar.
State financial institution considered that the price will start to fall further so it saw fit to sell to break even in the future.
The BCR has clarified that to sell this raw material is not the country's reserves are reduced as these consist of bank deposits of Salvadorans.
According to the law, banks that take deposits from the public must reserve 20% of that money and give it to BCR for it to guard it and manage it in a way that can have good yields (interest).
The money is invested in other currencies of developed countries and in pounds sterling, Swiss francs and other strong currencies that have a stable credit rating. Also they invest in financial instruments such as bonds or other certificates that generate profitability.
A report by September 2014 BCR indicated that some holders of liquidity reserves of the country are the Dominican Republic Central Bank, Bank of America, Citibank NA New York, The Bank of Tokyo - Mitsubishi.
Untouchable money
But this money is untouchable. The former Minister of Finance, Manuel Enrique Hinds, said that money is not the government but of depositors and therefore can not be used except to support users of the banking system if given case occurred a run of capital.
Other countries such as Venezuela, using cash reserves to finance their budgets, but El Salvador, which is dollarized since 2001 and therefore can not print money, does not need to use the reserve for anything other than to depositors the banking system.
Hinds explained that unlike El Salvador, Venezuela pledged their gold to obtain a credit millionaire. This means that Venezuela remains the owner of the gold, but to have cash, you will pay more interest to an international bank and its fiscal deficit will continue to grow year after year.
According to Hinds, in the country, liquidity reserves are constantly monitored, so it believes there is no way the money is used for other purposes.
