Gold sales already decided and decided by the undersigned institutions will be obtained through a concerted sales programme over a five-year period, effective September 27, 2004, shortly after the end of the previous agreement. Annual sales will not exceed 500 tonnes and total sales over this period will not exceed 2,500 tonnes. The negotiating countries did not agree on the duration of the treaty. Some countries supported a long-term agreement that would set its initial duration at 20 years, while others feared that anything beyond 10 years would be seen as an unnecessary extension of the war effort. Finally, at Portugal`s request, the treaty was validated for a period of ten years after which the treaty could be reviewed (Article 12); And it was only after the treaty came into force for 20 years that a member was able to withdraw from the organization (Article 13). To date, these two provisions have never been taken into account, i.e. the contract has never been audited or a member has never been removed from the organization. In August 2009, 19 banks renewed the agreement and committed to sell a total of 400 tonnes of gold by September 2014. The International Monetary Fund has not signed this agreement. [6] “The independence of central banks is enshrined in law in many countries, and central bankers tend to be independent thinkers. It is worth asking why such a large group of them decided to cancel this very unusual agreement… At the same time, the Council is aware, through our close contacts with central banks, that some of the largest owners have been concerned for some time about the impact of unfounded rumours on the price of gold – and therefore on the value of their gold reserves – and on the use of official gold for speculative purposes.

In 2019, the undersigned banks agreed not to renew the contract because they had not sold large volumes of gold for some time. [7] Their sales had gone from the near limit agreed in 2007 to almost zero in 2012, before remaining very low thereafter. [8] The annex to the agreement included ten paragraphs in which specific measures were agreed. How these measures were implemented is summarized below. The announcement of the agreement was surprising for the market. It led to a sharp rise in prices in the following days, but it also eliminated much of the uncertainty surrounding the official sector`s intentions. Once markets have adapted to it, an essential element of instability has been effectively eliminated by the introduction of greater transparency. To address these concerns, 15 European central banks – those of the 11 eurozone countries and Sweden, Switzerland and the United Kingdom and the European Central Bank at the time – developed the first central bank gold agreement, “CBGA1″.

Washington Agreement

  • December 20th, 2020
  • Posted in Uncategorized

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