According to a bill that leftist President Mr Evo Morales signed into law, Bolivia's central bank will be able to buy gold from thousands of small local miners to boost its reserves.

The amount the central bank intends to purchase was not made public, although sources at Bolivia's mining cooperatives have said the measure could initially involve about 2 tonnes of gold per year.

Bolivia a South American country rich in natural gas and mineral resources produces between 6.5 tonnes and 7.0 tonnes of gold per year almost all for export.

Official data shows about half the country's output comes from small cooperatives and firms. The new law stipulates the central bank will pay global prices to local miners.

Mr Marcelo Zabalaga chief of central bank said that "With this law we'll kill several birds with one stone: we'll be able to buy our gold we will increase our foreign reserves, and the nation's coffers will get a boost from the taxes on this operation."

According to International Monetary Fund data, Bolivia added 7 more tonnes of gold to its reserves in August, mirroring similar moves by Thailand and Russia.

(Sourced from Reuters)