IMF Gold Sale Update

Thanks Laura :-)

---

IMF seeks to sell 403.3 tonnes of gold in financial overhaul

WASHINGTON (AFP) - The International Monetary Fund Monday proposed the sale
of 403.3 tonnes of gold to bolster its sagging coffers as part of a
wide-ranging financial overhaul. The sale, amounting to some 12 percent of
its gold reserves, could yield around 11 billion dollars, IMF officials
said, supporting a reorganization of the institution as it seeks to survive
a downturn in lending to troubled countries. Managing director Dominique
Strauss-Kahn said in a statement the IMF would use the funds to help shore
up IMF finances and create a new endowment with more diverse investments to
generate income. The announcement comes with the IMF in the midst of an
intense effort to trim costs and slash jobs as its lending is scaled back,
with some countries refusing the IMF's conditional aid. The IMF faces a
budget shortfall of some 140 million dollars for the fiscal year 2008 that
ends on April 30. The sale would affect some 13 million ounces of the IMF's
103.4 million ounces of gold reserves. IMF officials said the sale would
likely take place over several years in an effort to avoid market
disruption. Still, the sale could have a dramatic impact on the market,
where according to IMF officials some 500 tonnes are traded annually. Gold
prices recently hit an all-time record above 1,000 dollars an ounce. An IMF
official speaking on condition of anonymity said an average price of about
850 dollars an ounce would generate about 11 billion dollars. The IMF said
the executive board agreed to revamp the institution's income model from one
that primarily relies on lending to one that "generates funds from various
sources." The expansion of the fund's investment authority is contingent on
a charter amendment that would need legislative action in most member
countries. In addition, approval by the US Congress is required for the US
executive director to vote for the gold sale. The reform plan requires
approval by 85 percent of the voting power of the institution's 185 member
nations, which is dominated by the US.

---

http://afp.google.com/article/ALeqM5jIowsxGM-hMWqLU-V0kBUXhOqnYQ