Sunday, February 26, 2012IMF board approves $1.1b gold sales profits
Washington—The Executive Board of the International Monetary Fund (IMF) approved the distribution to all IMF members of SDR 700 million (about US$1.1 billion) in reserves attributed to a portion of the windfall profits from recent IMF gold sales, with the expectation that members would return equivalent amounts to support concessional lending to low-income countries (LICs).
The distribution was first endorsed by the IMF’s Executive Board in July 2009 as part of a financing package aimed at securing adequate resources for the Poverty Reduction and Growth Trust (PRGT). The total financing package aims at raising the PRGT’s concessional lending capacity to SDR 11.3 billion (US$17 billion) over 2009-2014.
Contributions linked to the windfall gold profits will count towards that package’s target of raising an additional SDR 1.5 billion (US$2.3 billion) to subsidize the PRGT’s low-interest concessional lending, which currently carries a zero interest rate, with the balance coming from other sources, including additional bilateral contributions from member countries.
Managing Director Christine Lagarde said: “This is an important contribution to ensure the Fund’s continued support of its low-income members through adequate financing of the Poverty Reduction and Growth Trust. This is particularly important at a time when global volatility threatens low-income countries’ hard-won gains in strengthening their economies and reducing poverty. I urge Fund members to quickly confirm their pledges so that we can move forward.”
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