IMF approves plan to sell 403 tons of gold

“The International Monetary Fund (IMF) board of governors Tuesday approved the sale of 403.3 tones of IMF gold reserves as part of a wide-ranging financial overhaul that helps boost its sagging coffers. The plan would create an ‘endowment’, that helps provide a steadier source of income to the international organization that has drastically scaled back on lending. Governors from 176 of the Fund’s 185 member countries cast votes, with all in favor of the plan. Approval required a majority of the votes cast. “With this decisive endorsement, the Fund’s members have once again demonstrated their support for reforming key components of the institution’s framework, including its financial structure,” IMF Managing Director Dominique Strauss-Kahn said. The new plan calling for the endowment requires an amendment of the Fund’s Articles of Agreement, which will need to be accepted by at least three-fifths of IMF members. …” [Agence France Presse/Factiva]

Dow Jones writes that “… The whole reform package, including plans to sell a chunk of the IMF’s gold, now will have to be approved by the US Congress. The expanded investment regime and the quota reforms also need approval by some other countries’ legislatures before they can take effect. …” [Dow Jones/Factiva]

WSJ adds that “…there is some optimism the package will eventually be approved: Congressional reaction to the IMF’s plan to sell gold … is likely to be less hostile than in 2005 and 1999…Other countries also must approve parts of the overhaul package, but the US - with a 17% voting share - has effective veto power over the changes and is also the only country that has to give its blessing to the gold sales. …” [The Wall Street Journal/Factiva] (Worldbank.org)