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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (35293)	6/13/1999 3:34:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116753

Tietmeyer calls for less dogmatism on gold sales 02:00 a.m. Jun 13, 1999 Eastern FRANKFURT, June 13 (Reuters) - Bundesbank President Hans Tietmeyer on Sunday said that the question of selling International Monetary Fund gold to pay for poor country debt relief should be studied more carefully and professionally. Tietmeyer said in an interview on German radio that the German central bank, which has long opposed such a move, was not dogmatically against the idea, but would have to be convinced of the economic sense of such a move to give its approval. Tietmeyer said, according to a transcript of the interview: ''For the Bundesbank this is not a question of belief but rather a question of the economic response.'' He was responding to a question asking for his view on the sale of a small amount of International Monetary Fund gold to fund debt relief for the world's poorest nations. Germany, and particularly the Bundesbank, have in the past firmly opposed such sales, but Bonn's position has turned round since a new government was elected last September. German Finance Minister Hans Eichel said on Saturday that Bonn would back the sale of up to 10 million ounces of gold by the IMF. This would amount to about 10 percent of its total holdings and be worth about $2.6 billion at current prices. Tietmeyer repeated that the Bundesbank's preferred way to reduce debt would be through bilateral agreements. But he added: ''If that is not enough, and it appears that it may not be enough, then one must certainly look into the question of whether the gold reserves can be used in part, and by that I mean in a very small part.'' Tietmeyer noted however that the sale in itself would push down gold prices, which could cause problems for some of the poorest countries which are gold producers. This meant that it was critical that just the right amount was sold. ''If there have to be any gold sales at all then it should only be in very small quantities and a part of them should be used to replenish the International Monetary Fund reserves,'' Tietmeyer said. He added: ''This is not a decision which needs to be made now. But it should not be decided in the sense of an ideological position -- for or against gold sales on principle -- but rather decided on the basis that the direct and indirect effects that arise from the gold sales are taken into account,'' he said. ''I sometimes have the impression that the discussion is not being carried on in a sufficiently professional way.'' Most major industrial countries have for some time backed the idea of selling a small amount of IMF gold. But Germany until recently was the vocal ringleader opposing such a move. ((Janet Northcote, Frankfurt Newsroom +49 69 756525, frankfurt.newsroom+reuters.com)) Copyright 1999 Reuters Limited. All rights reserved.