BCRP and the purchase of gold: lost opportunity or risk for economic stability?

The recent discussion about the possibility that the Central Reserve Bank of Peru (BCRP) Buy gold in the domestic market has generated debate. During a press conference, the President of Congress, Eduardo Sallejuanahe said that, if this decision had been made, Peru would have obtained “significant” profits due to the rise in the price of metal.

However, the proposal has been hard. “It is not the first time that this nonsense is sought. The BCR does not go to the corner warehouse to buy gold. He has no balance sheet to weigh it and give you a price. It is not a pawn house. Lave your money/metal elsewhere, ”he published in X Marco Ortiz Sosa, Ph.D. In Economics and Master in Research in Economics by the London School of Economics and Political Science.

The BCRP, as an entity responsible for guaranteeing the country’s monetary and financial stability, enjoys autonomy in its decisions. This independence has been key to the control of inflation and trust in the financial system.

In that line, Adrián Armas, Central Manager of Economic Studies of the BCRPexplained in June 2024 before the Special Commission Multiparty Capital Peru of Congress that the purchase of gold by the Central Bank would imply a liquidity injection into the economy, which could affect its monetary regulation capacity.

“There are a number of initiatives on the issue of purchasing gold and I think we must remember, for example, the Central Reserve Bank – Organic Law – is authorized to buy gold. He does not. ”Eduardo Sallehuana said. “If one reviews the amount of US $ 74,000 million as an international reserve, they are basor bonds, debt papers and very little gold.”

The BCRP strategy for the accumulation of reserves is based on the diversification of safe assets, such as treasure bonds and other financial instruments that guarantee liquidity and stability. Therefore, the inclusion of gold in international reserves must be evaluated based on its macroeconomic impact.

“Buying gold means that the BCR prints money and the primary broadcast expands. At that time we are breaking the principle that has been since the 90s, that the Central Bank has full autonomy to achieve liquidity control, ”he said weapons.

In turn, economist Juan José Marthans warned about the risk that this proposal can benefit illegal activities. “I have been holding this point for years. The BCR directory, with a conservative approach, has not passed it. Today we must be careful, because there are many who support illegal and criminal mining and would like the BCR to become its washer. That these ignorant and scoundrels do not get into the broadcasting Institute. Let’s wait for decent people to evaluate that possibility again, ”he said in X.

Proposal

“If the Central Reserve Bank had acquired about eight months ago, how much money would have earned Peru with the valorization of gold?” The president of Congress questioned.

The position coincides with that of Jorge Manco Zaconetti, researcher at the Faculty of Economics of the San Marcos University, who at the beginning of the month told this newspaper that attributions should be given, but to the Bank of the Nation, so that I buy the gold informal paying a premium; That is, a surcharge, with the condition that miners formalize.

However, the idea would face a structural obstacle: 90% of the exploitation of gold made by organized miners is given in invaded private concessions.