The Central Bank of Cyprus denied reports about an impending sale of gold reserves which led to a drop in international bullion markets, according to an announcement available Thursday.
An alleged European Commission assessment on the financing needs of Cyprus following a bailout deal with international lenders was quoted as saying that the eastern Mediterranean island agreed to sell excess gold reserves to raise 400 million euros (523 million U.S. dollars) to partly finance its participation in its bailout.
"The sale of gold held by the Central Bank is a matter that concerns exclusively the Board of Directors of the Bank," said Central Bank spokeswoman Aliki Stylianou, adding that "nothing of the sort has been discussed and it is not being discussed at present either."
Following the original report, spot bullion prices fell by up to 1.7 percent on Wednesday.
Cyprus is expected to sign a 10 billion euro bailout deal with international lenders at a Eurogroup meeting in Dublin on Friday which will lead to much needed funds in time to pay a 1.5 billion euro Euro bond maturing on June 4.
But before any loan money is made available, the bailout deal has to be ratified by six national parliaments of Eurogroup countries and by the governments of 10 other group members.According to reported estimates prepared by the European Commission, Cyprus' financing needs will reach 23 billion euros by the first quarter of 2016. The Eurogroup will provide nine billion euros and the IMF a further one billion.
Cyprus is expected to generate 13 billion euros from losses imposed on major bank depositors, the merger of its two main banks and from raising fees and taxes.