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To: d:oug who wrote (38766)	8/10/1999 11:12:00 PM
From: Alex	Read Replies (1) \| Respond to of 116786

Alternative to IMF gold sales "may be found within months" <Picture> Johannesburg (Business Day, August 10, 1999) - The International Monetary Fund is trying to find ways to avoid selling gold to help highly indebted poor countries, and a method could probably be found within months. Stanley Fischer, IMF first deputy MD, who was in the country to attend the inauguration of new Governor of the Reserve Bank Tito Mboweni, said he was not in a position to say what these alternatives to gold sales would be. The IMF"s study of the matter was at an early stage and it was "too complicated and uncertain to give details". "We are trying very hard to see if there is a way of doing what gold sales are designed to do," Fischer said at the Reserve Bank in Pretoria at the weekend. He said the IMF did not want to rule out gold sales until there was an alternative solution. Fischer said the IMF"s search for new ways to fund debt relief came after discussion with SA officials and gold producing poor countries that may be eligible for debt relief. It was probable that the plan may be under reconsideration now because of opposition from members of the US Congress. The US has 17,4% of the voting power on the Fund Executive Board and all decisions involving gold required 85% approval. Fischer said he did not believe that any objective observer could say that the prospects of IMF gold sales was behind the recent weakness in the gold price as the proposal had been on the cards two years ago. The gold sales plan was given the go-ahead only earlier this year when the Group of 7 industrialised countries at their Cologne summit endorsed aspects of it. The plan is for interest generated by funds from the 10-million ounces in gold sales to finance the IMF part of debt relief for 41 of the world"s poorest nations. At the moment the IMF holds 103,4-million ounces of gold which are valued on its balance sheet in terms of Special Drawing Rights. SDRs are a form of international money representing a weighted value of the world"s major convertible currencies. At a valuation of SDR35/oz it is equivalent to $47,69/oz on yesterdays SDR/$ exchange rate. Gold closed in London yesterday at $256,50/oz. Fischer"s statement made little impact on the gold price, which was only $0,50 up from Friday"s close. The search for an alternative to outright sales may be made difficult by IMF regulations governing its sale of gold. The IMF can sell gold outright only at market prices. It cannot engage in loans, leases, swaps or the use of gold as collateral, and it cannot buy gold. By Jonathan Katzenellenbogen Copyright 1999 Business Day. Distributed via Africa News Online.