IMF targets gold profits to help poor countries

The IMF on Friday gave the go-ahead to distribute $1.1 billion in gold sales profits to members on condition they return most of it to boost the IMF's lending resources to poor countries. The International Monetary Fund said in a statement its executive board approved the distribution of part of the $10.6 billion in proceeds from 2009-2010 gold sales. Because the windfall profits come from the IMF's general resources, the IMF said it had to first distribute them to members. But it wants the gains returned to build up the Poverty Reduction and Growth Trust, the lending program for low-income countries. "Under the decision approved today, the distribution will be effected only when members provide satisfactory assurances that they would make new PRGT subsidy contributions equivalent to at least 90 percent of the amount distributed," or about $978 million, the 187-nation Fund said. The timeframe of the operation depends upon receiving such pledges from the IMF membership. "I urge Fund members to quickly confirm their pledges so that we can move forward," said IMF managing director Christine Lagarde. "This is particularly important at a time when global volatility threatens low-income countries' hard-won gains in strengthening their economies and reducing poverty," she said. In 2008 the board decided to put at least $6.8 billion of the profits in an endowment to diversify the IMF's income away from lending returns. The executive board "has yet to decide" how to use the remaining $2.7 billion of profits on the gold sales, the IMF said.