The IMF on Monday proposed the sale of 403.3 tonnes of gold to bolster its sagging coffers as part of a critical financial overhaul.
The sale, amounting to some 12 percent of its gold reserves, could yield around US$11 billion, IMF officials said, supporting a reorganization of the institution as it seeks to survive a downturn in lending to troubled countries, its main income source.
Managing Director Dominique Strauss-Kahn said in a statement that the IMF would use the funds to help shore up IMF finances and create a new endowment with more diverse investments to generate income.
The announcement comes with the IMF in the midst of an intense effort to trim costs and slash jobs as its lending is scaled back, with some countries refusing the IMF’s conditional aid.
The IMF faces a budget shortfall of some US$140 million for the fiscal year 2008 that ends on April 30.
The IMF’s has 2,931 tonnes of gold reserves.
IMF officials said the sale would likely take place over several years in an effort to avoid market disruption.
Still, the sale could have a dramatic impact on the market, where IMF officials said some 500 tonnes are traded annually.
Gold prices recently hit an all-time record above US$1,000 an ounce.
An IMF official speaking on condition of anonymity said an average price of about US$850 an ounce would generate about US$11 billion.
Of that, some US$6.6 billion would be used to create the endowment, he said.
The IMF said the executive board agreed to revamp the institution’s income model from one that primarily relies on lending to one that “generates funds from various sources.”
The expansion of the fund’s investment authority is contingent on a charter amendment that would need legislative action in most member countries.
In addition, approval by the US Congress is required for the US executive director to vote for the gold sale.
The reform plan requires approval by 85 percent of the voting power of the institution’s 185 member nations, which is dominated by the US.
Strauss-Kahn hailed the executive board’s proposal for a new financial framework, calling it “a landmark agreement that will put the institution on solid financial footing and modernize the IMF’s structure and operations.”
“We have made difficult, but necessary choices to close the projected income shortfall and put the fund’s finances on a sustainable basis,” Strauss-Kahn said.
The investment policies would include safeguards to ensure that the broadened investment authority “does not give rise even to perceived conflicts of interest,” the fund said.
At the same time, the board considered the medium-term budget for the financial years 2009 to 2011, which includes “deep spending cuts” of US$100 million and approved the administrative budget for the next financial year that begins on May 1.
“With these measures the fund expects to close the projected income-expenditure gap of US$400 million within a few years,” said the multilateral institution, which was created in the aftermath of World War II with a mission to promote global financial stability.
If approved, the new income model “could generate an additional US$300 million” in income within a few years, the IMF said.
Nearly 400 jobs are targeted for elimination, officials said. That process, currently under way, includes a period of voluntary departures that ends on April 21.
The announcement came ahead of the spring meetings of the IMF and its sister institution, the World Bank, in Washington this weekend.
RESILIENCE: Deepening bilateral cooperation would extend the peace sustained over the 45 years since the Taiwan Relations Act, Greene said Taiwan-US relations are built on deep economic ties and shared values, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday, adding that strengthening supply chain security in critical industries, enhancing societal resilience through cooperation and deepening partnerships are key to ensuring peace and stability for Taiwan in the years ahead. Greene made the remarks at the National Security Youth Forum, organized by National Taiwan University’s National Security and Strategy Studies Institution in Taipei. In his address in Mandarin Chinese, Greene said the Taiwan-US relationship is built on deep economic ties and shared interests, and grows stronger through the enduring friendship between
GAINING STEAM: The scheme initially failed to gather much attention, with only 188 cards issued in its first year, but gained popularity amid the COVID-19 pandemic Applications for the Employment Gold Card have increased in the past few years, with the card having been issued to a total of 13,191 people from 101 countries since its introduction in 2018, the National Development Council (NDC) said yesterday. Those who have received the card have included celebrities, such as former NBA star Dwight Howard and Australian-South Korean cheerleader Dahye Lee, the NDC said. The four-in-one Employment Gold Card combines a work permit, resident visa, Alien Resident Certificate (ARC) and re-entry permit. It was first introduced in February 2018 through the Act Governing Recruitment and Employment of Foreign Professionals (外國專業人才延攬及雇用法),
The Ministry of Transportation and Communications yesterday said that it would redesign the written portion of the driver’s license exam to make it more rigorous. “We hope that the exam can assess drivers’ understanding of traffic rules, particularly those who take the driver’s license test for the first time. In the past, drivers only needed to cram a book of test questions to pass the written exam,” Minister of Transportation and Communications Chen Shih-kai (陳世凱) told a news conference at the Taoyuan Motor Vehicle Office. “In the future, they would not be able to pass the test unless they study traffic regulations
‘COMING MENACINGLY’: The CDC advised wearing a mask when visiting hospitals or long-term care centers, on public transportation and in crowded indoor venues Hospital visits for COVID-19 last week increased by 113 percent to 41,402, the Centers for Disease Control (CDC) said yesterday, as it encouraged people to wear a mask in three public settings to prevent infection. CDC Epidemic Intelligence Center Deputy Director Lee Chia-lin (李佳琳) said weekly hospital visits for COVID-19 have been increasing for seven consecutive weeks, and 102 severe COVID-19 cases and 19 deaths were confirmed last week, both the highest weekly numbers this year. CDC physician Lee Tsung-han (李宗翰) said the youngest person hospitalized due to the disease this year was reported last week, a one-month-old baby, who does not