5.26 Definition:
The sub-category monetary gold (F.11) consists of all transactions in monetary gold (AF.11) that is gold held as a component of foreign reserves by monetary authorities or by others who are subject to the effective control of the authorities.
5.27
The monetary authorities sector, which is based on a functional concept,
consists of the sub-sector the central bank (S.121) and central government
institutions, which carry out operations usually attributed to the central bank. Such
operations include the issue of currency, maintenance and management of
international reserves and the operation of exchange stabilisation funds.
Therefore, gold can normally be a financial asset only for the central bank or
central government. However, in some circumstances, other financial
corporations may hold title to gold that can only be sold with the specific consent of
the monetary authorities. In such restricted circumstances, the concept of
effective control can be applied to the gold holdings of financial corporations other
than the central bank.
5.28
Monetary gold normally takes the form of bars with a purity of at least
995/1000.
5.29
Transactions in monetary gold consist predominantly of sales and purchases of
monetary gold among monetary authorities. Purchases of monetary gold are
recorded in the financial accounts of the domestic monetary authorities as increases
in financial assets. The counterpart entries are decreases in financial assets
of the rest of the world.
5.30
Transactions in non-monetary gold, that is in gold other than monetary gold,
are treated as acquisitions less disposals of valuables (if the sole purpose is
to provide a store of wealth) and otherwise as final or intermediate
consumption and/or change in inventories. Transactions in non-monetary gold include
transactions by the monetary authorities in gold that is not a component of their
foreign reserves.
5.31
If monetary authorities add non-monetary gold to their holdings of monetary
gold or release monetary gold from their holdings for non-monetary purposes, they
are deemed to have monetised or demonetised gold, respectively. Monetisation
or demonetisation of gold does not give rise to entries in the financial
accounts; instead, the change in balance sheet positions is accounted for by entries
in the other changes in the volume of assets account as a reclassification, i.e.
the reclassification of gold as valuables (AN.13) to monetary gold (AF.11)
(see paragraph
5.32
Deposits, securities and loans denominated in gold are treated as financial
assets other than monetary gold and are classified along with similar financial
assets in foreign currency in the appropriate category.
Non-monetary gold swaps, that is arrangements involving the temporary exchange
of non-monetary gold for deposits, are treated as collateralized loans (see
paragraph