asked the Minister for Finance whether he was consulted by the Central Bank of Ireland about the sale at $35 an ounce of gold worth about £5 million by the bank during the quarter ended 30th June, 1970.
Ceisteanna — Questions. Oral Answers. - Gold Sales.
25.
I was not consulted. The management of official monetary reserves is a matter for the Central Bank, acting within its statutory powers. Section 7 (1) (a) of the Central Bank Act, 1942, specifically empowers the bank to buy and sell gold.
Sales of gold by the Central Bank are made at the official price of $35 per fine ounce in accordance with the arrangements agreed between major central banks in March, 1968, for transfers of gold between monetary authorities. An account of these arrangements is given in the annual report of the Central Bank for the year 1967-68.
Does the Minister agree that we should get rid of our limited amount of gold as the Central Bank is now doing? It may be small but there could be situations in which it might be very useful. Does the Minister not recollect that the gold in the Bank of Ireland was shipped to London in 1916? Does the Minister agree with the decision of the Central Bank in this matter?
It is not my function to agree or disagree. The Central Bank is by statute charged with the duty of deciding whether or not our reserves in the form of gold or otherwise should be disposed of. The bank has set out its general policy in this regard. I might, however, set it out briefly. The policy is that in the management of external reserves their objective is to obtain as large a return as possible on the reserves consistent with, firstly, Ireland's commitments as a member of the IMF and as a participant in the Basle Agreement to safeguard the stability of the international monetary system, secondly, the necessity of keeping a sufficient amount of reserves in liquid form and, thirdly, the maintenance of their international value.
What is the reason on this occasion, or did they tell the Minister?
The reason is obvious: you do not get interest on gold.
May I ask the Minister whether it is a fact that when he talks about profit on gold he is talking arithmetic but not real economics? Gold is a reality and this type of profit is complete anathema in the realms of monetary economics.
I did talk about the Deputy's Tory economic policies and I think he is bearing me out.