IMF delays sale of gold reserves

Published June 27, 2007

WASHINGTON, June 26: The International Monetary Fund has delayed by one month a board meeting to discuss financial reform, including the possible sale of some of its valuable gold reserves, a spokesman said on Tuesday.

“The current plan is to have a board discussion on the Fund income position in late July,” IMF spokesman William Murray told AFP.

In early June, another spokesman, David Hawley, had said an initial board meeting to work on an income model “will take place later this month.” Revision of the IMF's financial model is a key element in the reform of the six-decade-old multilateral institution, which is seeking to redefine its role in a substantially changed global financial landscape.

The global lender has seen its operational income slump as debtor countries repay their Fund loans early and some countries are shunning its credit and the accompanying restrictions.

In late January, an IMF-appointed panel of leading experts called on the Fund to sell some of its gold reserves to assure its future. The Fund has forecast a revenue shortfall of $105 million for its 2007 business year ended April 30.

By 2010, the deficit is expected to climb to $365 million, the experts predicted. They suggested, among other measures, the sale of 400 tons of gold, which at the time could raise $6.6 billion at current market prices.

The IMF has more than 3,200 tons of gold as part of its financial stockpile, but has resisted selling any.

IMF chief Rodrigo Rato appointed the panel in May 2006 to come up with ideas to avert a cash crisis for the global lender.

The committee was chaired by Andrew Crockett, former head of the Bank for International Settlements, and also included European Central Bank president Jean-Claude Trichet and People's Bank of China governor Zhou Xiaochuan.

Money from the gold sales should be put in an endowment fund, which could yield annual investment profits of $195m, report by Crockett's panel said. —AFP