http://news.ft.com/cms/s/8c757556-787a-11d9-9961-00000e2511c8.htmlIMF looks at gold sale options for debt relief
By Andrew Balls, Chris Giles and Scheherazade Daneshkhu in London
Published: February 6 2005 20:13 | Last updated: February 6 2005 20:13
The International Monetary Fund is preparing a report on the potential sale of a portion of its gold reserves in a move that would help fund debt relief for poor countries but could unsettle the markets by threatening a drop in the price of gold.
<snip>
The IMF values its store of 3,217 tonnes of gold at about $8.5bn (€6.6bn) about a fifth of market value. Poor countries owe about $11bn to the IMF. If the IMF sold large quantities of gold, it could finance the debts owed to it by poor countries. An alternative option to be studied would be to revalue the gold in the IMF's accounts. This would strengthen its balance sheet, against which it could then write off lending to poor countries. But this is seen as an accounting gimmick that would do nothing to free up real resources within the fund. Gordon Brown, UK chancellor, who has long supported making better use of the IMF's gold, said the agreed move was an important step towards debt relief for poor countries, following a G7 meeting that focused on development aid and on Africa.
Gold producing countries sensitive to its price have traditionally opposed sales by the IMF, or by central banks. But Trevor Manuel, South Africa's finance minister, told reporters that South Africa would not necessarily oppose sales, as long as the process was carefully managed. Opposition to gold sales still exists within the G7, however. John Taylor, US Treasury under-secretary for international affairs, said the US was “not convinced that gold sales is a necessary way to do
”.
more:
http://news.ft.com/cms/s/8c757556-787a-11d9-9961-00000e2511c8.html