Sri Lanka buys 10 tonnes of IMF gold


From Agence France-Presse
via Yahoo News
Wednesday, November 25, 2009

WASHINGTON -- The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka's central bank for $375 million, as part of a restructuring of IMF financial resources.

It was the third IMF sale of gold in a month as the Washington-based institution, the world's third-largest official holder of the precious metal, seeks to reduce its dependence on lending revenue and bolster its finances amid the global economic crisis.

The IMF said the sale to the Central Bank of Sri Lanka was based on the market prices prevailing Monday.

On November 2, the IMF sold 200 tonnes of gold to India's central bank for $6.7 billion, then sold two tonnes of gold to Mauritius on November 16 for $71.7 million.

The IMF executive board approved in September the sale of 403.3 tonnes of gold. The fund, which currently holds roughly 3,000 tonnes of gold, is the third largest official holder of the precious metal after the United States and Germany.

The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."

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International Monetary Fund Press Release
Wednesday, November 25, 2009

IMF Announces Sale of 10 Metric Tons of
Gold to the Central Bank of Sri Lanka

Press Release No. 09/431

The International Monetary Fund announced today the sale of 10 metric tons of gold to the Central Bank of Sri Lanka.

The sale was conducted on the basis of market prices prevailing on November 23, 2009 with proceeds equivalent to US$375 million (SDR 234 million).

This transaction is part of the total sales of 403.3 metric tons approved by the Executive Board in September 2009 (see Press Release No. 09/310), and it adds to the total of 202 metric tons already sold to the Reserve Bank of India and the Bank of Mauritius (see Press Release No. 09/381 and Press Release No. 09/413).

As previously announced (see Press Release No. 09/310), in accordance with the guiding principle of avoiding disruption of the gold market, the IMF's Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established. In particular, the Fund is standing ready for an initial period to sell gold directly to central banks and other official holders that may be interested in such sales.

Thereafter, on-market sales of any amounts remaining from the 403.3 tons would be conducted in a phased manner over time, following the approach adopted successfully by central banks participating in the Central Bank Gold Agreement.

As previously indicated, the Fund will inform markets before any on-market sales commence, and will report regularly to the public on progress with the gold sales.

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