Washington Agreement


“The deal was reached in response to concerns in the gold market, after the UK Department of Finance announced it was proposing to sell 58% of UK gold reserves through Bank of England auctions, with the prospect of significant sales by the Swiss National Bank and the possibility of ongoing sales by Austria and the Netherlands. plus the IMF`s sales proposals. The British announcement, in particular, had strongly destabilized the market, since it was announced in advance, unlike most other European sales by central banks in recent years. Sales from countries like Belgium and the Netherlands have always been discreet and were announced after the event. Thus, the Washington/European agreement was perceived at least as a ceiling for European sales. [2] The Washington Gold Agreement was signed on September 26, 1999 in Washington, D.C. The annual meeting of the International Monetary Fund (IMF) was attended by U.S. Treasury Secretary Lawrence Summers and Federal Reserve Chairman Alan Greenspan. [1] The second version of the agreement was signed in 2004 and extended in 2009. In August 2009, 19 banks extended the agreement and pledged not to sell more than 400 tonnes of gold by September 2014. The International Monetary Fund has not signed this agreement. [6] “Central bank independence is enshrined in law in many countries, and central bankers tend to be independent thinkers.

It is worth asking why so many of them decided to join this very unusual agreement. At the same time, through our close contacts with central banks, the Council has become aware that some of the largest holders have been concerned for some time about the impact of unfounded rumours about the price of gold – and therefore the value of their gold reserves – and the use of official gold for speculative purposes. Under the agreement, the European Central Bank (ECB), the 11 national central banks of the countries participating in the new European currency at the time, as well as those of Sweden, Switzerland and the United Kingdom, agreed that gold should remain an important component of the world`s currency reserves and limit their sales to just over 400 tonnes (12.9 million ounces) per year for the five years from September 1999 to September 2004. a total of 2,000 tonnes (64.5 million ounces). [2] 4. . . .