IMF earmarks $2.7 bn in gold sales windfall for concessional lending to needy economies
The International Monetary Fund has given the go-ahead to the use of USD$2.7 billion in profits from gold sales to bolster financial assistance to developing economies.
According to an official statement the IMF's executive board has allocated the money to the Poverty Reduction and Growth Trust, a program which provides concessional financial assistance to low-income nation-states.
The allocation of the profits is conditional upon "satisfactory assurances that an amount equivalent to at least 90% of the distribution will be made available to the PRGT."
Christine Lagard, the IMF's managing director, says the decision is a major move for putting concessional lending operations to low-income members on "a sustainable footing."
During the 2009 financial crisis, we were able to boost financial assistance to our low-income country members, helping them weather the storm and preserve their hard-fought gains in the battle against poverty. The strategy endorsed today by the Executive Board ensures the IMF is better positioned to help our low-income members absorb future shocks and underpin their efforts to achieve stronger and sustainable economic growth.
The IMF sold 403.3 metric tons of gold from 2009 to 2010 to guarantee the long-term financing of the international lender's daily operations. The sale reaped windfall profits of USD$3.8 billion from spot prices well above the $850 originally anticipated.
Image of Christine Lagard courtesy of IMF via Youtube