IMF can keep funding low-income countries via gold profits
WASHINGTON (Reuters) - The International Monetary Fund on Thursday said it had received approval from its member nations to transfer profits from gold sales to a fund to help low-income nations, freeing up about $1.9 billion a year in available aid.
"We have just reached the threshold of enough approval from our membership to transfer the existing gold profit to meet the financing needs of our low-income countries," IMF chief Christine Lagarde said at a news briefing ahead of the fall meetings of the IMF and World Bank.
"We now have secured critical resources to provide adequate levels of financial support to the poorest countries for years to come," she later added in a statement.
The IMF made a $3.8 windfall in 2009 and 2010 from sales of 403.3 tonnes of gold, taking advantage of record prices in bullion. It said it now could provide an amount of concessional lending that is in line with what countries have asked for.
The Fund last year agreed to distribute the windfall to its members in two parts, on condition the countries reinvested at least 90 percent of the money in a zero-interest loan program for poor countries.
Now that a sufficient number of larger countries, such as the United States, China and Japan, have committed to giving up most of their windfall allotments, a few smaller countries can retain most of their shares.
So far, 151 of the IMF's 188 members have agreed to give back their allotments.
In 2009, the IMF set a target to raise $17 billion to lend to the poorest countries, which were threatened by the risk of contagion from the euro zone debt crisis and a drop-off in foreign aid after a global recession.
Lagarde has pushed to meet that goal, seeking to ease concerns that the IMF and donor nations may turn a blind eye to the world's poor as they focused on containing the euro zone crisis.
The windfall from the gold sales will make the Poverty Reduction and Growth Trust sustainable, Lagarde said. The Fund provides low-cost loans to poor countries in Africa, Asia and Latin America.
(Reporting by Anna Yukhananov; Editing by Tim Ahmann and Andrea Ricci)
