The International Monetary Fund this week said it was selling 200 metric tons of gold to the Reserve Bank of India, representing almost half of the total sales volume of 403.3 metric tons that was approved by the Executive Board in September.
“I strongly welcome this transaction with the Reserve Bank of India,” Managing Director Dominique Strauss-Kahn was quoted as saying in an IMF statement. “This transaction is an important step toward achieving the objectives of the IMF’s limited gold sales program, which are to help put the Fund’s finances on a sound long-term footing and enable us to step up much-needed concessional lending to the poorest countries.”
The transaction, which is in the process of being settled, involved daily sales that were phased over a two week period during October 19-30, 2009, with each daily sale conducted at a price set on the basis of market prices prevailing that day. The total sales proceeds are equivalent to US$ 6.7 billion or SDR 4.2 billion. Under the Fund’s Articles of Agreement, all gold sales must be conducted at prices based on market prices, including direct sales to official holders as in the case of this transaction.
As previously announced, the IMF’s Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established. In particular, the Fund is standing ready for an initial period to sell gold directly to central banks and other official holders that may be interested in such sales.
hereafter, on-market sales of any amounts remaining from the 403.3 tons would be conducted in a phased manner over time, following the approach adopted successfully by central banks participating in the Central Bank Gold Agreement. As previously indicated, the Fund will inform markets before any on-market sales commence, and will report regularly to the public on progress with the gold sales. |
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