You are here

Visiting London, IMF director threatens gold market again

Section: Daily Dispatches

IMF Still Eyeing
Gold Sales
to Fill Income Gap

From Reuters
Monday, May 14, 2007

LONDON -- The International Monetary Fund is still considering whether to sell 400 tons of its gold stocks to help plug a widening income shortfall, the head of the global lender, Rodrigo Rato, said on Monday.

The IMF announced on January 31 that it was considering recommendations by an independent panel, including the sale of gold, after demand for IMF financial assistance has almost dried up, prompting an income shortfall of $165 million for fiscal 2007.

The IMF forecast that income gap would widen further to about $224 million in the next fiscal year.

"If the fund is to remain effective and legitimate, it must be properly financed," Rato, the IMF's managing director, said in text prepared for a speech to British members of parliament.

"I will make specific proposals based on the report (of the panel) over the next few months," Rato said, listing gold sales among the measures under consideration.

The gold sale is one of several measures recommended by the committee that included former U.S. Federal Reserve Chairman Alan Greenspan.

The 400 tons of gold represents about one-eighth of the IMF's 3,217 tons (103.4 million ounces) of gold stocks, and it is worth about $68.4 billion at current market prices of around $669.00 an ounce.

* * *

Full text of Rato's speech as prepared for delivery:

* * *

at the
World Gold, PGM, and Diamond Investment Conference
in Vancouver, British Columbia, Canada
Sunday and Monday, June 17 and 18, 2007

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at GATA is grateful for financial contributions, which are federally tax-deductible in the United States.