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IMF says its gold sales likely will be staggered

Section: Daily Dispatches

By Lesley Wroughton
Wednesday, July 29, 2009

WASHINGTON -- The planned sale of 400 tonnes of IMF gold would take place within a new central bank gold sales agreement being negotiated, a senior International Monetary Fund official said Wednesday.

The IMF has provisionally agreed to sell the gold to raise resources for increased lending to poor countries. A final decision by all 186 IMF member countries on the sales is expected by IMF meetings in Istanbul in October and requires the support of 85 percent of the membership.

"We have committed as part of our new income model to have that gold sale, if done on the markets, to be done through the central bank sales mechanism," said Reza Moghadam, director of the IMF's Strategy, Policy and Review Department.

Moghadam told a conference call the sales would take place through the central bank mechanism "all the time" and could take two to three years.

He said he hoped negotiations on the new Central Bank Gold Sales Agreement will also be finalized by October. The current five-year agreement expires in September.

The IMF said on Wednesday it would use some of the proceeds from the sale of IMF gold to increase lending to poor countries by up to $17 billion through 2014.

The IMF holds 103.4 million ounces (3,217 tonnes) of gold, which had a market value of about $12 billion as of March 31.

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