Mr Kelvin Thomson asked the Treasurer, upon notice, on 23 September 1997:

Is the current proportion of Reserve Bank reserves held in gold adequate.

Mr Costello (Treasurer) —The answer to the honourable member's question is as follows:

The Reserve Bank's media release that accompanied the announcement of the sale of gold reserves on 3 July 1997 said, in part,

`The Australian sales program followed a review by the Bank of the costs and benefits of holding a significant part of international reserves in the form of gold. Following the review, the Bank's Board concluded that, while there was a case to hold some gold as a contingency against unforeseen events, the previous holdings (which amounted to about 20 per cent of international reserves) were no longer justified.'

After making the adjustment to its holdings, the bank holds about 80 tonnes of gold, which represents about 7 per cent of reserves. The Bank believes this is consistent with Australia's long term requirements, and has no plans for additional sales or purchases.