OWN CORRESPONDENT, Frankfurt | Monday 11.20am
FINANCE ministers from the Group of Seven leading industrial nations agreed on Saturday on the sale of 10-million ounces of IMF gold to finance debt reduction for the world’s poorest countries.
“There will be a very limited amount of gold sales, 10-million ounces,” German Finance Minister Hans Eichel told a news conference after a one-day G7 meeting in Frankfurt.
But the proceeds will be entirely for the Highly Indebted Poor Countries (HIPC) programme aimed at reducing the debt of the world’s poorest countries, Eichel said.
“There will be no gold sales to finance Kosovo,” he added.
Several industrial countries, including Britain, the United States and Japan, have already endorsed the sale of as much as 10-million ounces (nearly 300 tons), or some 10% of the International Monetary Fund’s gold reserves, to help meet the cost of the HIPC initiative.
But Germany had fiercely opposed the plan until a new government took power late last year and hinted it might be willing to consider a gold sale.
The news is likely to further depress the gold market, already in decline since Britain announced last month its intention to sell 415 tons of gold, more than half its reserves, over three to four years.
The price has been falling ever since, and on Wednesday slumped to $259.25 an ounce, its lowest level since May 1979.
The agreement on the IMF gold sales is part of a deal reached by G7 finance ministers on Saturday on reducing the massive debt burden of the world’s poorest countries. — AFP