08/03/1998 16:12:46 Russia to issue gold-backed paper soon-banker
MOSCOW, Aug 3 (Reuters) - Russia plans to issue gold-backed government
securities soon worth a maximum total of 50 tonnes of gold, a banker who
participated in working out the programme said on Monday.
UNEXIMBank deputy chiarman Yevgeny Ivanov told Reuters that Prime Minister
Sergei Kiriyenko signed main terms for circulation of the securities. Now the
Finance Ministry is to issue a more detailed plan, he said.
The government will sell the paper, called "gold certificates", among gold
miners who are to pay for them in kind. The miners will be obliged to sell the
securities on the secondary market.
The government will hold auctions where miners can sell their certificates
at the Moscow International Stock Exchange, the only exchange with a licence for
operations with gold. Ivanov added that first auctions would take place in
"Of course, not all 50 tonnes will be placed at once, there will be three or
five auctions," Ivanov said. "It is clear that a $500 million issue in
September, when the liquidity of the Russian baking system is quite low, is
interesting to attract non-residents."
Under the programme, foreigners have the right to buy the certificates. But
since none of them have licences for operations with gold, they can only do that
on the secondary market, or through a Russian bank-agent.
Russian banks can also act as agents to export gold for foreign clients,
He said the securities would have maturities coinciding with the schedule of
gold mining with tranches maturing in August, September, October and November
((Alexander Yershov, Moscow Newsroom, +7095 941-8520