The Fund is debating a proposal to sell 10 per cent of its gold stocks to fund Third World debt relief. But right-wingers in the US Congress are deeply hostile to the idea, saying that any proceeds should be paid back to the US and to the other IMF shareholders. Gold producers are also lobbying heavily against the plan.
The IMF discussion centred on the background rather than on detailed arrangements. "We will not sell this gold in a disorderly or rash way which would depress an already depressed market," said IMF managing director, Michel Camdessus (pictured).
The plan would entail selling up to 10 million ounces of gold over several years to assist Heavily-Indebted Poor Countries (HIPCs). The World Gold Council is lobbying against the sales, arguing that they would further damage indebted African countries which either produce gold or are dependent on remittances from migrant labour in the gold mines. Of the 41 HIPC countries, 36 are gold producers. Gold prices are at 20 year lows and have lost 10 per cent since the Bank of England announced plans to sell some of its reserves in May.Reuse content