Russia to issue gold-backed paper soon-banker
12:39 p.m. Aug 03, 1998 Eastern
MOSCOW, Aug 3 (Reuters) - Russia plans to issue gold-backed government
securities soon worth a maximum total of 50 tonnes of gold, a banker who
participated in working out the programme said on Monday.
UNEXIMBank deputy chiarman Yevgeny Ivanov told Reuters that Prime
Minister Sergei Kiriyenko signed main terms for circulation of the
securities. Now the Finance Ministry is to issue a more detailed plan,
he said.
The government will sell the paper, called ''gold certificates,'' among
gold miners who are to pay for them in kind. The miners will be obliged
to sell the securities on the secondary market.
The government will hold auctions where miners can sell their
certificates at the Moscow International Stock Exchange, the only
exchange with a licence for operations with gold. Ivanov added that
first auctions would take place in September.
''Of course, not all 50 tonnes will be placed at once, there will be
three or five auctions,'' Ivanov said. ''It is clear that a $500 million
issue in September, when the liquidity of the Russian baking system is
quite low, is interesting to attract non-residents.''
Under the programme, foreigners have the right to buy the certificates.
But since none of them have licences for operations with gold, they can
only do that on the secondary market, or through a Russian bank-agent.
Russian banks can also act as agents to export gold for foreign clients,
Ivanov said.
He said the securities would have maturities coinciding with the
schedule of gold mining with tranches maturing in August, September,
October and November 1999.
((Alexander Yershov, Moscow Newsroom, +7095 941-8520
moscow.newsroom+reuters.com))
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