IMF takes up gold sales to expand lending
WASHINGTON — The International Monetary Fund’s executive board on Friday was discussing selling some of the fund’s gold to provide low-interest loans to poor countries and shore up its internal finances.
The move, authorized by the G-20 countries at their summit in London in April, has been long expected and discounted by commodity markets, where the price of gold has been rising amid fears of a weakening dollar and a resurgence of inflation.
The key question for the markets is whether the IMF will sell its gold in auction over a set period of time to get the best price or let central banks from member governments buy it. China, India and Russia, eager to reduce their position in dollar-denominated securities, have expressed interest in buying IMF gold.
IMF officials have said repeatedly the sale will be carried out in a way that does not disrupt the market and in coordination with European central banks, who agreed last month on amounts of gold they will sell during the next five years.
The IMF, a 186-nation Washington-based lending institution, is the third-largest official holder of gold in the world after the United States and Germany.
The IMF is planning to sell about one-eighth of its gold, the equivalent of nearly 13 million ounces, worth roughly $13 billion at current market prices.
The IMF decision comes in advance of next week’s G-20 summit in Pittsburgh, Pa., and the fund’s annual meeting early next month in Istanbul.
In April, the G-20 agreed on the gold sale as part of efforts to provide up to $6 billion in concessional loans to low-income countries.
The IMF is expected to use some of the proceeds to diversify its sources of income by setting up an endowment fund, as recommended by a panel of experts that studied IMF finances, including former U.S. Federal Reserve Chairman Alan Greenspan.
In recent years, some countries with thriving economies managed to pay off their IMF loans ahead of time, reducing income the IMF derived from loan interest and putting a strain on its finances. The IMF is expected to be running a deficit of $400 million in 2010.
The head of the IMF, Dominique Strauss-Kahn, instituted some belt-tightening measures when he took over in 2007, amid suggestions the organization was becoming increasingly irrelevant because of its shrinking loan portfolio,
As the global financial crisis hit and a severe recession and credit crisis set in, the IMF has come roaring back, providing emergency loans to a dozen countries ranging from Iceland to Pakistan.
Related News
Genworth Financial completes $45M sales of Genworth Seguros Mexico to HDI-GerlingOctober 1st, 2009 Genworth Financial closes sale of Genworth SegurosNEW YORK — Genworth Financial Inc. said Thursday that it completed the $45 million sale of Genworth Seguros Mexico S.A.
IMF approves sale of its gold to be used in to spur lending and to shore up its financesSeptember 18th, 2009 IMF approves sale of some of its goldWASHINGTON — The International Monetary Fund approved on Friday the sale of a limited amount of its gold to help provide loans to poor countries and shore up its finances. The fund's executive board said it decided to sell "a volume strictly limited to 403.3 metric tons" — one-eighth of its holdings — in a way that does not disrupt the sale of gold in commodity markets, which already were expecting the sale and discounted the IMF decision.
IMF to sell one-eighth of gold reservesSeptember 18th, 2009 WASHINGTON - The International Monetary Fund (IMF) will sell one-eighth of its gold reserves and the money raised will in part be used to assist low-income countries, the IMF said. "The Board approved the sale of up to 403.3 metric tonnes, or about one-eighth of the Fund's total gold holdings.
Boston Globe workers told by Times Co. that newspaper's finances improving, sale not certainSeptember 9th, 2009 Times Co. execs meet with Boston Globe workersBOSTON — Executives at the parent company of The Boston Globe say that the newspaper's finances have improved significantly and that a sale is not a certainty. The leaders of The New York Times Co.
Canada's Eldorado Gold to acquire rest of Sino Gold Mining for $1.8B in stockAugust 26th, 2009 Eldorado to acquire rest of Sino GoldVANCOUVER, British Columbia — Canada's Eldorado Gold Corp. says it has agreed to buy all remaining shares of Australia's Sino Gold Mining Ltd.
A breakdown of servicers taking part in Treasury's loan-modification plan to aid homeownersAugust 6th, 2009 The servicers in gov't loan-modification planA look at the loan servicers in Treasury's mortgage-modification program, the taxpayer money they could receive and the percentage of eligible loans they've offered to modify so far. The servicers will keep some of Treasury's money and will pass some of it on to investors and homeowners.
'World's most expensive chocolate' unveiled by Spandau Ballet starAugust 4th, 2009 LONDON - Spandau Ballet frontman Tony Hadley has launched the "world's most expensive chocolate bar". The 49-year-old singer delivered the gold leaf-covered special edition of a Wispa Gold bar worth 961.48 pounds to Selfridges.
Court approves sale of Fleetwood motor home assets to New York private equity for $53 millionJune 26th, 2009 Court OKs $53M sale of Fleetwood motor home assetsNEW YORK — Recreation vehicle maker Fleetwood Enterprises Inc., which has been operating under bankruptcy protection for three months, has received court approval to sell its motor home assets to a private equity firm for $53 million. The sale to New York-based American Industrial Partners Capital Fund IV LP includes two motor home manufacturing facilities and Fleetwood's Gold Shield supply subsidiary.
Investors show no appetite for Fed program to bolster commercial real-estate loansJune 16th, 2009 Commercial real-estate loans draw no interestWASHINGTON — Investors showed no appetite for a government plan intended to boost the availability of commercial real-estate loans. The Federal Reserve Bank of New York says it received no investor requests for loans by Tuesday's deadline.
Bamboo-beaten reef fish coughs up still-ticking gold watch at Hawaii beachJune 4th, 2009 Timely fish tale: Hawaii fish coughs up gold watchELEELE, Hawaii — Hawaii resident Curt Carish boasts a timely fish tale: a 10-inch reef fish he caught by hand in shallow water coughed up a ticking gold watch. Carish says he was enjoying a picnic Wednesday on Port Allen beach when he saw the nenue fish awkwardly swimming close to shore.
$115M sale of exclusive Yellowstone Club to Boston investor group approved by judgeJune 3rd, 2009 Exclusive Yellowstone Club sale approved for $115MBILLINGS, Mont. — A federal bankruptcy judge has approved a plan to sell the exclusive Yellowstone Club in Montana for $115 million to a Boston investor group.
Government stress tests show Wells Fargo needs more money to survive deeper recessionMay 4th, 2009 Wells Fargo asked to raise money after stress testWASHINGTON — Regulators have told Wells Fargo & Co. to shore up its finances after government "stress tests" showed the bank would have trouble surviving a deeper recession.
Gold sale up 14 percent on Akshaya TritiyaApril 30th, 2009 MUMBAI - Gold sales across the country zoomed 14 percent in value terms April 27, this year's Akshaya Tritiya, compared to the auspicious day last year, the World Gold Council (WGC) announced here Thursday. Akshaya Tritiya is an auspicious day according to the Hindu calendar for buying long-term assets like gold and silver, including ornaments made of the same, diamond and other precious stones, and real estate.
US Steel loses $439 million in 1Q as recession weakens steel demand, pricesApril 27th, 2009 US Steel posts 1Q loss as demand dropsPITTSBURGH — United States Steel Corp. says it lost $439 million in the first quarter as the recession pinched demand for the metal.
If the IMF sells some gold, the poor countries want some of the profitsApril 23rd, 2009 Poor nations looking to gain from an IMF gold saleWASHINGTON — There really is a pot of gold. It belongs to the International Monetary Fund — $95 billion worth.
Loading ...