Gold price rise catches debtors

NGANJUK, East Java: Two hundred elementary school teachers in Nganjuk who took out debts linked to the price of gold have been caught short by sharp rises in the price of the precious metal.

"Last year, many teachers were contacted by salesmen working for a man called Wagiran. They were offered loans linked to the price of gold," a teacher who asked for anonymity told Antara on Saturday.

They were asked to submit an identity card, letter of appointment and a recommendation from the school's principle when taking out the loans.

Last year, gold was bought for an average of Rp 15,000 per gram and sold for Rp 22,000. This year's selling rate has reached Rp 60,000 per gram.

"When I borrowed the money last year... it was worth 49 grams of gold, equal to Rp 735,000. Now I have to repay more than Rp 2 million," the teacher said.

No officials were available for comment at the weekend. (edt)