Manufacturers, Exporters, Wholesalers - Global trade starts here.
Online marketplace of Manufacturers & Wholesalers
Chinese(GB) Chinese(BIG5) Deutsch     
  Home
  National
  Politics
  Government
  Law
  Sci&Edu
  Rural
  Local
  World
  World Biz
  Asia - Pacific
  Africa
  Americas
  Europe
  Middle east
  Business
  Macro-economy
  Enterprise
  Industries
  Markets
  Equities
  Currencies
  Commodities
  Life
  Social
  Sports
  Health
  Environment
  Arts & heritage
  Entertainment
  Insight

 
World / World Biz Email this Article  Print this Article 
IMF may sell gold holdings
Last Updated(Beijing Time):2006-11-23 15:04
The International Monetary Fund, the world's third-biggest owner of gold, should sell some of its hoard to cover projected operating losses, said a growing number of the fund's executive directors.

The Washington-based lender predicted it will lose US$87.5 million next year and US$280 million in 2009. Some directors said the fund should sell a portion of its 103 million ounces of gold, valued at US$64.7 billion, and invest the proceeds in interest-bearing assets, Bloomberg News reported.

"We would support the use of fund gold as part of the solution to IMF financial needs," Tuomas Saarenheimo of Finland, chairman of a group that coordinates the position of European Union members on the fund's 24-person board, said in Washington.

The prospect of gold sales highlighted the financial crunch faced by the fund as countries such as Uruguay repay loans early, reducing the fund's interest income, and demand for fresh credit ebbs. Proponents must overcome opposition from the United States, the world's third-largest producer and the biggest owner, which wants to keep gold prices high.

"Large gold holders and producers like the US have been worried that IMF sales would drive down the gold price," said Ted Truman, a former US Treasury assistant secretary and a scholar at the Peterson Institute for International Economics in Washington.

Brookly McLaughlin, a spokeswoman for the Treasury Department, said sales aren't "the appropriate option at this time for dealing with funding issues at the IMF." She declined to elaborate.

Rather than sell gold, the IMF should rein in an annual budget that has doubled to US$980 million in the past decade, said Devesh Kapur, an economist at the University of Pennsylvania in Philadelphia.

"Costs at the fund have been allowed to get out of control," said Kapur. "It now has a far bigger staff and budget than its role justifies."

A sale of gold is among the options before an eight-person panel on IMF finances appointed in May by Managing Director Rodrigo de Rato. The panel, whose members include former US Federal Reserve Chairman Alan Greenspan, is to submit its report early next year. Other solutions include cutting expenses and asking member states to make contributions.

Jeroen Kremers, the executive director from the Netherlands, said limited gold sales are preferable.



Source:Shanghai Daily 
© China Economic Net.  All rights reserved.
About us | Feedback | Contact