IMF Projects $5.1b Profit from Gold Sales in FY'10


"The sales will increase the fund's resources for lending to low-income countries."

The IMF expects to record a profit of USD 5.1 billion from gold sales in the financial year ended April 30, 2010.

Gold sales are a part of the multilateral lending agency's new income model, mainly aimed at increasing its resources to lend to low-income countries.

The net income in FY'10 would include "gold profits estimated at about SDR 3.5 billion (USD 5.1 billion) from part of the limited sale of the fund's gold," according to the IMF.

SDR or Special Drawing Rights is an international reserve asset created by the IMF to supplement its member countries' official reserves. The value of SDR is based on a basket of four key international currencies—the euro, yen, pound sterling and USD.

In its mid-year review, the IMF had estimated that its profits from gold sales would be worth about SDR 3.25 billion. This projection has now been raised to SDR 3.5 billion.

The IMF sold 212 metric tons of gold in October–November, 2009. Out of the total, India purchased 200 tons at an estimated cost of USD 6.7 billion.

"The gold sales, a central element of the fund's new income model, will fund an endowment and also increase the fund's resources for lending to low-income countries. . ." the agency said in a recent statement.

Meanwhile, the IMF is expected to report a net operational income of SDR 365 million (about USD 534 million) for financial year 2010, compared to earlier estimates that pegged net operational income at SDR 290 million (about USD 424 million) at the beginning of the year.

"This improved outlook is primarily attributed to higher-than-expected earnings on the fund's investment portfolio, which is made up largely of fixed-income securities, and lower net administrative expenditures, in SDR terms, reflecting movements in the USD/SDR exchange rate," the statement noted.

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