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Bank Of England

Volume 406: debated on Thursday 12 June 2003

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To ask the Chancellor of the Exchequer what difference has been recorded in the present value of the reserves in consequence of the instruction to the Bank of England to sell gold and to invest in particular currencies. [118679]

The restructuring of the reserves portfolio announced in May 1999 was a long-term, prudent restructuring to reduce the risk of over-exposure to a single asset. As such it is inappropriate to measure gains or losses resulting from fluctuations in market values on a particular day or over a short-term period.Once account is taken of all the elements of the restructuring programme, including earnings on foreign currency assets purchased from the proceeds of the sale, the annualised return on the assets invested in (from the sales of gold to the end of May 2003) was approximately 9 per cent. per annum in US dollar terms.