MIKE

by Tyler Durden
Zero Hedge
02/27/2011 14:07 -0500

Looks like speculation that the Egyptian Central Bank’s gold stash may have been just modestly plundered is starting to play out. According to Reuters. “Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewelery and ornaments, until June 30, the official news agency MENA said on Sunday. “This decision, which comes in light of the exceptional circumstances the country is passing through …, is to preserve the country’s wealth until the situation stabilizes,” MENA said. Egypt’s currency has come under pressure after some of the country’s main sources of foreign currency, including tourism and foreign investment, collapsed after the protests that ousted President Hosni Mubarak erupted on Jan. 25.” Obviously, this “emergency” step would not be required if the E(gyptian)CB was still in full possession of its purported stash of the inedible metal. Whether the decline is due to alleged Mubarak sequestering of the shiny metal, or by other members of the former ruling regime is unclear, but one thing is certain: the WGC is long overdue in adjusting the Egyptian gold holdings from 75.6 tonnes to their real current value… far lower. As for Egyptian fiat: that is as freely exportable now as ever. If only anyone wanted it. But yes, somehow emerging markets are manipulating their currencies lower than fair value, the conventional wisdom claims.

Reuters Article:

CAIRO (Reuters) – Egypt on Sunday banned the export of gold for the next four months, a measure bankers said seemed aimed at preventing businessmen and former government officials who acquired capital illegally from transferring it abroad.

An official from a gold mine in Egypt said he was confident it was not aimed at gold production but at individual exports.

A decree banning the export of gold in all its forms, including jewelry and ornaments, was issued by newly appointed Trade Minister Samir el-Sayyad. It takes effect immediately and continues until June 30, the official news agency MENA reported.

“This decision, which comes in light of the exceptional circumstances the country is passing through …, is to preserve the country’s wealth until the situation stabilises,” MENA said.

The MENA statement made no mention of whether the ban included exports of gold from mining. But an official from the flagship Sukari gold mine of Centamin Egypt said he was confident the order did not affect the mine’s operation.

“For Centamin this is not a problem … I know 100 percent that this is not a problem for us,” said Youssef el-Raghy, managing director for the Sukari gold mine, adding that the ruling appeared aimed at individuals taking gold out of Egypt not producers of gold like Centamin.

The Egyptian pound has come under pressure after some of the country’s main sources of foreign currency, including tourism and foreign investment, collapsed after the protests that ousted President Hosni Mubarak erupted on January 25.

But bankers said the decision on gold exports seemed designed more to stop individuals from expatriating funds under the radar than to stem major capital outflows.

“It is most likely aimed at the big guys — the top officials and businessmen who are under suspicion,” said John Sfakianakis, a Riyadh-based economist with Bank Saudi Fransi. “They are blocking capital flight in a new asset class.”

A banker in Cairo also said it seemed aimed at former officials or executives trying to smuggle gold or wealth out of the country.

Read the entire article HERE.

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