Why our gold bars in HK - Solomon Star News

Why our gold bars in HK

31 March 2014

CENTRAL Bank of Solomon Islands (CBSI) says investing the country’s gold bars in Hong Kong (HK) is important because of its closeness to buyers.

The bank was responding to questions raised by Malaita Ma’asina Forum (MMF) as to why CBSI has recently deposited the seven gold bars in Hong Kong (HK) and not in the country.

MMF said it does not look right for a country like Solomon Islands whose economy and currency going down to deposit its gold bars overseas.

“When we deposit these gold bars in Hong Kong, they are the ones benefiting and not us here in the country. It seems that this country has been remote controlled by foreigners.

“And CBSI and the government has to take action against these foreign influence because it seems that what the government and the bank is doing is not to benefit the people of this country,” Dausabea said.

But in response Central Bank said Hong Kong is one of the major gold depositories in the world and is also well connected in terms of international flights and hence their handling and shipment of physical gold are very efficient, secure and meet international standards.

The bank added that Hong Kong is also centrally located and close to the main gold markets in the region.

“The cost of bringing the gold from Hong Kong to Solomon Islands would be very high not only in terms of transportation costs but more importantly the substantial security cost involved in moving the gold from Hong Kong to Honiara.

“Also if in the future if we want to sell the gold to an overseas buyer, and if the gold is held in Solomon Islands, it has to be transported from Honiara to the buyers’ nominated depository overseas which, could very costly for us.

“So in view of the considerations above it was decided to keep the gold bars in Hong Kong where they were originally stored,” the bank said in respond.    

The bank said at this point in time there is no intention of bringing the gold bars back to the country because of the hefty transportation and security costs incurred.

Meanwhile the bank said the country has a total of 31 pieces of gold bars and not seven gold bars as quoted and  as of last week they are worth SBD $266 million at current market prices.

By Daniel Namosuaia