IMF approves gold sale to aid poor
The Group of 20 key developed and developing countries, at their April summit in London, agreed the gold sales should allow the IMF to offer favorable conditions on loans to the poorest countries.world Updated: Sep 19, 2009 11:20 IST
The International Monetary Fund said its executive board endorsed the sale of 403 tonnes of gold, worth an estimated $13 billion, to boost its lending capacity to poor countries.
The IMF said in a statement the sales would be "in a volume strictly limited to 403.3 metric tonnes, with these sales to be conducted under modalities that safeguard against disruption of the gold market."
The 186-nation institution said the decision was a core element of a new income model to make it less dependent on its lending revenue to cover expenses, such as surveillance of members' economic and financial policies, that the board had approved in April 2008.
The Group of 20 key developed and developing countries, at their April summit in London, agreed the gold sales should allow the IMF to offer favorable conditions on loans to the poorest countries.
The IMF decision comes ahead of a two-day G20 summit in Pittsburgh, Pennsylvania, that opens next on Thursday.
Hosted by US President Barack Obama, leaders are to discuss efforts to recover from the worst global recession in six decades and financial regulatory reform.
"The new income model is designed to provide the fund with more diverse income sources that are better aligned with the variety of functions performed by the fund, with a central component being the funding of an endowment with the profits from these limited gold sales," the 186-nation institution said.