November 20 (SeeNews) - Romania's president Klaus Iohannis said on Wednesday that he has sent back to parliament for further consideration the bill that would require the central bank to repatriate its gold reserves held abroad.
"One of the reasons for establishing and maintaining international reserves (including gold) is to create and enhance the confidence in a country and to allow negotiation of lower costs on international loans or other transactions," Iohannis said in his motives for the decision published on the website of the presidential office.
"A legislative intervention could have as a consequence the limitation of the right to use the gold reserves in carrying out the legal tasks of the central bank, which could create the premises for a rise in financing costs," he said.
In April, the lower chamber of parliament passed the bill, prompting a warning from the European Central Bank (ECB), who had asked to be consulted on the matter. The Romanian central bank has warned the lawmakers that the ECB should give the green light to the plan before it moves forth.
Convicted ex-Social Democrat Party (PSD) leader Liviu Dragnea and senator Serban Nicolae drafted the bill in February.
"The National Bank of Romania can deposit gold from the established reserve abroad exclusively for the purpose of obtaining income through trading and other specific operations. The gold deposited by the National Bank of Romania abroad can not exceed 5% of the total gold reserve," the bill reads.
According to the explanatory statement accompanying the draft law, nothing in Romania's economic situation justified keeping such amount of gold as a reserve abroad, with all related high costs, provided that this reserve can be properly maintained and supplemented in domestic deposits.
The gold reserves of the central bank remained unchanged at 103.7 tonnes and were worth 4.492 billion euro ($4.971 billion) at current international prices at the end of October, according to the latest data available.
According to local media reports, some 61 tonnes of the Romanian central bank's gold reserves are being held at the Bank of England.