Like most other central banks, the Riksbank also owns gold. The Riksbank owns gold because of gold's historical links to banknotes and coins. In the past, a coin or banknote could be redeemed at any time at the Riksbank in exchange for gold. However, this link no longer applies. There is no provision that stipulates that the Riksbank must maintain a gold reserve. This means that, at present, gold is mainly regarded as a financial asset. The price fluctuations of gold do not usually follow the price fluctuations of foreign exchange reserve assets. This means that the price fluctuations of a portfolio including both foreign exchange reserve assets and gold may be narrower than those of a portfolio only including one of these. Furthermore, gold can be used to fund temporary liquidity assistance or foreign exchange interventions.
The Riksbank has concluded an agreement with a number of other central banks, the Central Bank Gold Agreement (CBGA), which places a limit on the amount of gold that the central banks party to the agreement may sell each year. The aim of this agreement is to limit the central banks’ sales of gold in order to avoid undesirable effects on the gold price.
