|IMF Sells 440.3 Tons Of Gold|| |
Dominique Strauss-Kahn, IMF managing director, welcomed the board's move on Monday, the action seen as a buffer to the expected $400 million budget deficit the Washington-based lending institution could experience in the next few years.
The board is projecting to generate at least $11 billion from the sale of at least 12 percent of its gold reserve. The money to be generated from the sales would fund the reorganization of the IMF and finance lending to needing countries.
Strauss-Kahn said it will also shore up diverse investments to generate income.
However, the IMF still needs congressional approval and legislative action of the 184 member-nations of the IMF.
The IMF is facing the challenge of cutting costs and trimming its bureaucracy, after a downturn in lending as some countries refuse to borrow money due to IMF's strict conditions.
The lending firm has a projected budget deficit of at least $140 million for the fiscal year 2008 which will end on April 30.
However, the IMF said the sale of the gold will be carried out in several transactions over several years so as not to affect the international gold market.
Global price of gold reached an all-time high of over $1,000 an ounce.