IMF: Libya Holding Huge Gold Reserves
Source: BBC, Andrew Walker (3/23/11)
"Reserves could potentially be used to finance Colonel Gaddafi's government."
The reserves are substantial, ranking in the global top 25, according International Monetary Fund (IMF) data.
They could potentially be used to finance Colonel Gaddafi's government at a time when it is subject to international financial sanctions.
This is rather speculative, it must be said, but the gold could in principle generate millions of dollars in revenue, which could be used for example to pay foreign fighters.
The gold reserves that Libya could dip into are very large for what is a small country in terms of population—with six million people—and in terms of economic activity.
The IMF data show Libya's reserves to be 4.6 million ounces, a figure of nearly 144 tons. At current market prices the value is over $6bn.
So why does Libya have such a large holding of the precious metal?
Colonel Gaddafi does have past experience of being on the receiving end of international sanctions. The fondness for gold could well reflect a desire to have an asset that can be kept at home, away from foreign enemies.
However, it is not easy to turn gold into cash under current circumstances.