Subject: Why Did Bank Negara Sell Off Half of Malaysias Gold Reserves At Low Prices?

Why Did Bank Negara Sell Off Half of Malaysia's Gold Reserves At Low Prices?

The International Monetary Fund's International Financial Statistics reported on 10 December 1999 that Malaysia=92s gold reserves went down by half in August 1999 from 2.34 million ounces the month before.

The price of gold on the London Metal Exchange (LME) went down to a two month low price of US$252.55 per oz. on 25 August 1999 (from US$261.50 on 17 August 1999) as a consequence of rumours of heavy selling by the Malaysian authorities.

Taking the August 1999 average price of US$256.72 per oz, 1.17 million oz of gold would have sold for US$300,362,400, or about RM1,141,371,200.

Bank Negara Malaysia should have informed the Malaysian people of the circumstances of and reasons for this sell-down of half of Malaysia's gold reserves at a time of low gold prices, and how the gold sales revenue has been deployed.

Jomo K. S.