While the international community has administered sanctions and asset freezes against Libya, the nation's gold reserves are believed to be among the world's 25 biggest, according to the International Monetary Fund.
But, the Financial Times reports, countries, banks and trading houses are likely to be apprehensive about associating with the dictatorial regime, thus Muammar Gadhafi will run into trouble liquidating the assets should the desperate need arise.
"Physical trading houses are now quite reluctant to deal with countries that have been involved with conflict – they don't know who's on the end of the trade," one banker told the publication.
The central bank in Tripoli might no longer hold the 143-plus tons of gold, the FT reports. But the assets are believed to still be in Libya as opposed to being locked away in vaults in London, New York or Switzerland as other nations prefer. Gadhafi can only use those reserves as a last resort if he can liquidate them, according to analysts.
"If a country like Libya wants to make their gold liquid it would probably be in the form of a swap – whether for arms, food or cash," Walter de Wet, head of commodities research at Standard Bank, told the publication.
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