The Swiss National Bank (SNB) has begun selling part of the country's gold reserves, following a change in the law which came into force on Monday. It said it planned to sell a first tranche of up to 120 tonnes of gold by September.
The bank said it had commissioned the Basel-based Bank for International Settlements with the sale of the first tranche. The SNB plans to divest itself of 1,300 tonnes of gold over the next five years.
The decision to formally abandon the gold standard means that the SNB will sell off a maximum of 400 tonnes of gold each year until the end of 2004. The SNB is one of 15 European central banks, which set this ceiling last September in an effort to maintain price stability.
It remains to be decided what will happen to the SFr17 billion the sales are expected to generate. The Swiss government has said it wants the income from the sale of 500 tonnes of the gold to finance a planned charity fund.
Political parties and cantonal finance directors all have their own ideas on how to spend the money. These include funding the old-age pension scheme, to subsidising education and easing public debt.
It is still unclear whether the charity, the Solidarity Foundation, will turn into reality because, among the four parties represented in the government, only the Radicals and Social Democrats are behind it.
The Swiss People's Party has been collecting signatures for an initiative calling for all the proceeds from the 1,300 tonnes to go to the old-age pension scheme.
For its part, the Christian Democratic Party distanced itself from the Solidarity Foundation in mid-March, calling for the gold sale proceeds to be divided equally for the pensions scheme, training and the Geneva-based International Committee of the Red Cross.
swissinfo with agencies