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Refusing to sell gold in 2007, Bundesbank offers its quota to other central banks

Section: Daily Dispatches

By Christian Vits
Dow Jones Newswires
Thursday, October 5, 2006

FRANKFURT -- Germany's Bundesbank doesn't intend to sell gold reserves during the next 12 months except some sales for coinage, it said Thursday.

According to the European Central Bank's Gold Sales Agreement, the Bundesbank can sell up to 120 metric tons of gold a year until 2009. The third year of the agreement started Sept. 27. Since the beginning of the agreement the Bundesbank has refused to sell larger amounts of its gold reserves.

Germany's gold reserves amount to 3,400 tons. While Bundesbank profits are transferred to the federal budget, it's the responsibility of the bank to administer its assets.

"Apart from sales to mint coins, the Bundesbank won't sell gold in the third year of the European agreement," a Bundesbank spokesman said.

But the bank is in contact with other central banks in order to transfer its third-year option to them, Bundesbank President Axel Weber said on the sidelines of the European Central Bank's Governing Council meeting in Paris.

"I don't think that we will conclude the talks in the next two weeks," he said.

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