IMF completes $3.8 billion Gold profit distribution

WASHINGTON: Six months after allocating the first part of profits from the 2009-10 403.3 tons gold sales to member country's, IMF agreed to release the remaining $2.7 billion to boost financing to low-income countries. According to a statement, IMF said it's executive board earmarked the money for the global lender's concessional lending program, the Poverty Reduction and Growth Trust. The IMF earlier earmarked the release the total $3.8 billion windfall from the gold sales to it's 188 member country's and released the first part of $1.1 billion in March. The statement said the distribution of the windfall profits will occur only when members have given satisfactory assurances that an amount equivalent to at least 90 percent of the distribution will be made available to the PRGT. Legally, the profits from gold belong to all IMF member countries, so the Fund needed the board's approval before it could use money solely for loans to poor countries. An IMF official said the board debated for two years whether the gold windfall should go to fight poverty. 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. The IMF sold 403.3 tonnes of gold in 2009-2010 in a bid to put the Washington-based lender's finances on a sound long-term footing. Due to the high price of gold at the time, the IMF booked $3.8 billion in profits.

Courtesy: BullionStreet