IMF to use unexpected profits from gold sales to fund loans to poorest countries
The International Monetary Fund announced on Thursday it has harnessed windfall gold profits from member countries to fund loans to the world’s poorest countries in the coming years.
“We have just reached the threshold of enough approvals from our membership to transfer the existing gold profit to meet the financing needs of our low-income countries,” IMF managing director Christine Lagarde said.
Calling it “the good news of this week”, Lagarde, speaking at a news conference as IMF and World Bank annual meetings got under way in Washington, noted it had been the fund’s goal for years to put its Poverty Reduction and Growth Trust on a sustainable basis.
The IMF said 151 of its 188 member countries had pledged more than 90 per cent of the roughly US$2.7 billion in windfall profits remaining from a gold sale to the trust.
The fund had sought to use members’ resources linked to the gold sales to partially fund the trust, which offers lending under flexible conditions – at a zero interest rate at present – to low-income countries.
We now have secured critical resources to provide adequate levels of financial support to the poorest countries for years to come
The trust now has funding to support more than US$3.4 billion in concessional lending, allowing it to lend almost US$2 billion annually, in line with the IMF’s estimate for demand from poor countries.