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UPDATE 1-Bank of Portugal says no Cyprus-style gold sales
May 14, 2013 / 1:10 PM / 4 years ago

UPDATE 1-Bank of Portugal says no Cyprus-style gold sales

(Adds gold reserves size, quotes)

LISBON, May 14 (Reuters) - Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.

“It is not applicable in Portugal,” he told reporters. “What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal.”

Last month Cyprus said a sale of gold reserves worth 400 million euros was among the options for its contribution towards an international bailout, which also forced bank depositors to bear part of the costs in a ground-breaking move in Europe.

“If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves,” Costa said. The value of Portugal’s reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.

He added that Portugal, which resorted to an EU/IMF bailout in 2011 and has applied painful austerity measures since, remains on course to exit its three-year recession next year and grow just over 1 percent despite a worsening European downturn.

“There are no reasons to revise the economic forecasts,” he told reporters. The bank’s 2013 forecast of a 2.3 percent contraction is the same as the government‘s, but its 2014 growth projection is higher at 1.1 percent, compared with 0.6 percent.

Reporting By Sergio Goncalves, writing by Andrei Khalip; Editing by John Stonestreet, Ron Askew

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