In recent weeks, Argentina’s central bank has relocated part of its gold reserves to international locations for financial certification, a strategic move aimed at enhancing the country’s financial flexibility, according to sources familiar with the situation. Once verified, the gold could potentially be used as collateral to secure financing.
Before this move, approximately half of Argentina’s gold reserves were held domestically, while the other half was stored in London. Central bank officials, known by their Spanish acronym BCRA, have declined to provide details on the matter.
The BCRA confirmed on Monday that it had transferred gold between its accounts both within Argentina and abroad. However, it did not disclose the amount of gold involved, the purpose of the transfer, or its destination. Officials have criticized reports about the gold transfer as “irresponsible,” emphasizing that reserve management is typically kept confidential.
On August 19, the newspaper Pagina 12 released a video showing a truck bearing the BCRA logo heading toward Buenos Aires’ main international airport, reportedly transporting $250 million worth of gold bars.
This gold movement underscores the ongoing economic challenges faced by Argentine President Javier Milei. The country’s low international reserves are limiting his ability to ease currency controls and raising concerns about the administration’s debt repayment capabilities.
Economy Minister Luis Caputo recently stated that Argentina plans to meet its debt obligations due in January 2025 but will not seek additional international financing until early 2026. It remains unclear how Caputo and Central Bank Governor Santiago Bausili intend to utilize the gold once it is certified. Caputo has indicated that the government is negotiating a special purchase agreement with commercial banks.
To be deemed usable for financial transactions, gold must meet the standards set by the London Bullion Market Association (LBMA). Once certified, the gold bars can be traded freely among institutions within the LBMA market.
Argentina’s central bank faces a challenge of net negative reserves, meaning its liabilities exceed its cash holdings. This financial shortfall has eroded investor confidence in the peso and kept sovereign debt trading below 60 cents on the dollar, although there has been some improvement since Milei assumed office. Current net reserves are approximately negative $6.9 billion, according to local brokerage Portfolio Personal Inversiones.
Previously, under Federico Sturzenegger’s leadership from 2015 to 2018, the central bank engaged in futures operations to generate returns on its gold reserves. Caputo defended the recent transfer of gold abroad in a July interview with LN+, stating that holding gold overseas could maximize asset returns, which is crucial for the country’s financial strategy.
