IMF :: Gold Sale Profits

The International Monetary Fund on Friday approved a plan to distribute about $1.1 billion in profits from past gold sales to IMF member countries, with the expectation they would return the money to fund an anti-poverty loan programme. "This is an important contribution to ensure the Fund's continued support of its low-income members through adequate financing of the Poverty Reduction and Growth Trust," IMF Managing Director Christine Lagarde said in a statement. Under the IMF board's decision, the $1.1 billion in gold sales profits would be distributed once member countries have provided "satisfactory assurances" that they will return at least 90 percent, or $978 million, for the currently zero-interest loan program for low-income countries.

 The profits will be divided among IMF members in proportion to their financial commitment to the fund, known as their quota share. As a result, the United States, Japan, France, Germany, Britain and China will receive the largest sums. "I urge Fund members to quickly confirm their pledges (to return the money) so that we can move forward," Lagarde said. The IMF board approved a limited sale of the Fund's gold reserves in 2008 to diversify income soures. The sales carried out between October 2009 and December 2010 generated total revenue of about $14.8 billion, of which $10.6 billion was profit. The Fund has already decided to place at least $6.8 billion of the profits in an endowment to diversify the IMF's income away from the money it earns on loans. It still has not decided how to distribute another $2.7 billion in profits from the gold sales.