The International Monetary Fund, which has been authorized by the G-20 leaders to sell gold to assist poor countries, is sitting on reserves of the yellow metal of 3,217 tons, valued at $95 billion.
The IMF, the third-largest official holder of gold in the world, has been directed by the G-20 leaders at their recent summit in London to generate additional resources by selling gold to provide $6 billion concessional loans to low-income nations over the next 2 to 3 years.
The United States has the largest official reserves of gold in the world (over 8,000 tons), followed by Germany at around 3,400 tons.
According to the IMF, the market value of its 103.4 million ounces (3,217 tons) of gold was $ 95.2 billion as on February 20, 2008.
The IMF has also been directed by G-20 leaders to come up with concrete proposals for gold sale at the spring meetings to be held in Washington on April 25-26.
The proposal to sell 403.3 tons of the Fund’s gold, said IMF Survey online, was agreed on last year as part of a plan to bolster the income of the multilateral organization.
The decision, it added, would require the support of 85% of the Fund’s executive board, in addition to legislative action by several member countries, including the United States.
Pointing out that no executive decision has been taken by the Fund’s executive board to sell the gold, the IMF said under its Articles of Agreement the move would require an 85% majority of the total voting power.
The US, which holds about 17% of the voting rights at the IMF, has indicated to the Fund that it would have to seek authorization by Congress before supporting the gold sale decision.
US Treasury Secretary Timothy Geithner had earlier indicated that the US authorities would approach Congress for a limited sale of gold, consistent with the Crockett Committee’s recommendations.
The Crockett Committee had recommended that gold sales should be limited to 12.97 million ounces (403.3 tons), equivalent to one-eighth of the IMF’s holdings.
It also recommended that if gold is sold in the market, rather than to another official holder, such sale be phased over time in order to avoid market disruption. (The Economic Times)