Bank of Algeria sets rules for gold trading on local market

Banks and financial institutions may buy, sell and store gold on Algeria's local market under a new regulation published in the Official Journal.

Algérie Eco reported that the regulation, number 26-04 of 17 September, sets the rules for gold deals by the Bank of Algeria, banks and financial institutions. It applies articles 41 and 79 of law no.

23-09 of 21 June 2023.

The text covers quality, valuation, traceability and payment for gold deals.

What can banks do with gold?

Banks and financial institutions may buy and sell gold for immediate and future delivery, with individuals and companies.

They may also store gold, open gold accounts and grant loans secured by gold.

The Bank of Algeria may buy and sell gold for immediate and future delivery with banks and financial institutions. It may also buy gold from official agencies and bodies that process and sell precious metals.

A gold account is an account at a bank or financial institution, measured in an amount of gold.

In an allocated account, the holder owns identified physical gold, measured in grams, ounces or shares. In an unallocated account, the holder has a general claim on a shared gold reserve.

Which gold counts as eligible?

The regulation defines gold as a precious metal in many forms.

It includes raw, refined, cast and granulated metal, as well as bars, coins and jewellery.

Gold is eligible only if it meets conditions on quality, purity, origin and traceability.

What are the limits?

Each institution's net position in gold may not exceed 10% of its regulatory own funds.

Banks and financial institutions may do these deals only within the limits of their business purpose and the conditions of their licence.

A detailed Bank of Algeria instruction will follow, setting the characteristics of eligible gold.