Washington - The International Monetary Fund's executive board on Friday approved the sale of 403.3 tons of gold from its reserves to secure its finances and fund loans to low-income countries. The sale amounts to one-eighth of the IMF's reserves and is valued at about 13 billion dollars at current gold prices.
The move is part of a plan outlined by the IMF last year to diversify its income by selling part of its gold reserves to create an endowment. The money will help to fund a major increase in the IMF's lending over the past year to help countries suffering from the global financial downturn.
"I am delighted that the executive board has given its overwhelming backing to a strictly limited sale of fund gold to put the financing of the IMF on a sound long-term footing, and enable us to step up much-needed concessional lending to the poorest countries," Managing Director Dominique Strauss-Kahn said in a statement.
In order to avoid any disruption of the gold market, the sales will be made directly to central banks or sold on the markets over a longer period of time, the IMF said.
