Austria to repatriate large gold reserves from Britain

Austria to repatriate large gold reserves from Britain
File photo of gold bars stacked at a safe deposit room

VIENNA - Austria's central bank announced on Thursday it would repatriate a large part of its gold reserves currently stored in Britain, after auditors warned of the risk of bulk storing in a foreign country.

Until now the Austrian National Bank has kept 80 per cent of its 280 tonnes of gold - worth around 8.6 billion euros (S$12.6 billion) - in London.

But by 2020, the Bank of England's stock of the precious metal will be reduced to 30 per cent, while Austria will hold 50 per cent and Switzerland 20 per cent.

The central bank said it took the decision after recommendations made by the Austrian Court of Audit in February, which warned of a "heightened concentration risk" linked to storing the majority of its reserves in Britain.

At the time, the bank had argued the policy was warranted because London was a major international centre for the gold trade.

However, the bank changed its mind after reviewing the court's advice to diversify storage locations.

Vienna confirmed it would begin to gradually repatriate 92.4 tonnes this summer. A further 47.6 tonnes will be transferred from Britain to Switzerland.

Austria's move echoes an announcement by Germany in 2013, which said it would repatriate all of its gold stocked in France as well as some of the reserves held in the United States, to ensure at least 50 per cent was kept on German soil by 2020.

Meanwhile, Swiss voters rejected a proposal in late 2014 to force the central bank to bring back gold reserves from Britain and Canada.

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