IMF sees gold sales to c.banks as possible option
WASHINGTON, July 16 (Reuters) - Gold sales to central banks rather than to the
market are one option for the International Monetary Fund as it assesses how to pay
for debt relief and loans to poor countries, a senior IMF official has said.
IMF Deputy Managing Director Alassane Ouattara, quoted by USA Today on
Thursday, also said the IMF might try to work with European nations to limit their
gold sales. This work could be coordinated through the Bank for International
Settlements.
''The aim is to protect the gold market so the sale will not have a major impact,''
Ouattara said.
Most IMF member governments want the fund to sell some 10 million ounces of its 103-million ounce stockpile to fund
a concessionary lending program for poor countries and to pay for enhanced debt relief programs for debtor states that
have reformed their economies.
The prospect, coupled with sales from countries such as Britain, has spooked the gold market and driven prices down
sharply.
The IMF's board discussed the issue last Friday, but made no decision on how to proceed with the sales, which will
need approval from a hostile U.S. Congress. Monetary sources said at the time that sales to central banks might be one
option.
An IMF statement released after the board meeting said the fund would handle its gold sales ''in a transparent way
without disrupting the market.''
The IMF expected further discussions over the coming months and hoped the issue could be resolved before the annual
meetings of the IMF and World Bank in September.
Ouattara, who leaves the IMF at the end of this month, said one option was to sell IMF gold to central banks in Asia
instead of to the market.
He rejected criticism of the proposed sales from gold producing countries, noting that the volume of planned IMF sales
was small and that the fund could also lend money to gold-producers like Ghana and South Africa, which were hit by
falling gold prices.
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