The Central Bank of Ecuador confirmed the use of gold to obtain a credit

Ecuadornews:

October 18, 2017, the Central Bank of Ecuador confirmed through its website that it activated a liquidity facility approved by a foreign bank for $ 200 million, to a one-month term and with an annual rate of 1.44%.

For the activation of this credit line, the Central Bank must maintain USD 200 thousand troy ounces as restricted gold. For this reason, there is a reduction of USD 225.9 million in the gold balance and an increase of USD 200 million in the balance of investments, term deposits, and securities accounted for in the Weekly Monetary Bulletin.

This is not the first time that the Central Bank uses the gold reserves to obtain a credit. At the end of May 2014, the CB announced it had invested half of its gold reserves in the international market through the US bank Goldman Sachs.

As a result of this investment, the Ministry of Finance “benefited” from a loan of USD 400 million at an annual rate of 4.3%.

At the end of February this year, Ecuador’s gold returned to the CBs reserves. (I)

Source: http://www.expreso.ec/economia/bancocentral-oro-credito-economia-ecuador-BF1777344