G20 didn't increase IMF gold sales

By Lesley Wroughton
Reuters
via Business Spectator, Australia
Friday, April 3, 2009

http://www.businessspectator.com.au/bs.nsf/Article/IMF-gold-sales-are-ag...

LONDON -- Planned International Monetary Fund gold sales agreed by the G20 to raise money for low-income countries apply only to the 403 tonnes already approved last year and are not additional, an IMF spokesman said.

"The gold sales apply only to those amounts already agreed and announced previously by the IMF," IMF spokesman William Murray told Reuters.

The IMF last year approved the sale of 403 tonnes of its 3,217 tonnes (103.4 million ounces) gold stocks as part of a plan to overhaul its income model and to create an endowment with the profits from the sales.

But since the global financial crisis began and more countries are in need of funding, the G20 has decided to allocate the profits from the sale of the 403 tonnes to resources for poorer developing countries.

The sale of the already approved gold will, however, not happen immediately.

Selling IMF gold requires ratification by member countries' legislatures, including the US Congress, a decision that is expected to take at least several months, perhaps longer.

The G20 communique at the end of a leaders' summit in London said, "We have committed, consistent with the new income model, that additional resources from agreed sales of IMF gold will be used, together with surplus income, to provide $US6 billion additional concessional and flexible finance for the poorest countries over the next 2 to 3 years."

There was no mention in the final communique of bringing forward the gold sales, although it called on the IMF "to come forward with concrete proposals" at the IMF's spring meetings later in April.

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