The International Monetary Fund has secured about $1.92 billion per year needed to fund low-income countries through a zero-interest rate lending program.
In 2009, the fund sold 403 metric tonnes of gold, resulting in $3.8 billion in windfall profits. In 2009 the organization’s executive board agreed to distribute the funds among member states in two parts, on the condition that the money was put directly into the Poverty Reduction and Growth Trust (PRGT) – a lending scheme accessible only to impoverished nations.
Now, 151 member countries – representing over 90% of the partially distributed profits – have transferred the funds to the PRGT. These countries include economic giants such as China, the US and Russia.
“Today marks the culmination of an effort underway for many years to put the PRGT on a sustainable footing,” said Christine Lagarde, IMF managing director, in a statement. “I would like to thank our member countries who have stepped forward to make these pledges, and help us reach this historic milepost. We now have secured critical resources to provide adequate levels of financial support to the poorest countries for years to come.”
The funding is part of an IMF initiative to increase the PRGT’s concessional lending capacity to $17 billion by 2014.
Currently the organization provides zero-interest lending to low-income countries.
As of September 2013, the IMF held 2,814 metric tonnes of gold. The largest source of its bullion reserves dates back to 1944 when countries used gold to pay for 25% of their subscription quotas.