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. Last Updated: 07/27/2016

IMF Ready to Sell Gold To Fund Debt Relief Plan

WASHINGTON -- Rich countries said they wanted to help the poor and would sell gold from the International Monetary Fund's reserves to pay for a much-needed program of debt relief.

Ministers and central bank chiefs meeting in Washington on Tuesday backed the idea of gold sales to pay for debt relief for poor countries that show a clear commitment to pro-market economic reform.

"This will certainly entail some sales of gold," IMF managing director Michel Camdessus told a news conference at the end of a daylong meeting of the fund's policy-making interim committee.

The idea of IMF gold sales has long been on Camdessus' personal agenda, but it was only in the last few months that the IMF's major shareholders have come round to the idea.

The sales, which Camdessus said would take place in an "orderly and prudent manner," would fund debt relief and pay for the IMF's main lending program for poor countries, the Enhanced Structural Adjustment Facility.

Camdessus did not say how much of its 103 million ounce stockpile the IMF might sell. Some ministers want the fund to sell 5 million ounces, while others argue for sales of 10 million ounces or more - raising more than $2.82 billion.

The U.S. Congress must approve the deal.

The new agreement on IMF gold sales was in sharp contrast with ministers' attitudes on reviving a world economy still shaking off the impact of turmoil in Asia and Russia.U.S. officials again told their main trading partners that the booming U.S. economy cannot forever remain the single engine of world economic growth.

Japanese Finance Minister Kiichi Miyazawa, long accustomed to fending off U.S. complaints about Japan's economy, tried to turn the tables on his hosts and urged them to watch out for overheating.

Meanwhile, international financial institutions and 33 countries agreed Tuesday to urgently address the devastating economic impact of the Kosovo war on neighboring countries, which could cost billions to repair.

A joint statement issued after a high-level meeting in Washington said neighboring Balkan countries would need "a swift donor response ... to help meet the severe humanitarian and other financial needs" caused by a wave of refugees who have streamed out of the war-hit Serbian province of Kosovo since March.

A joint report from the World Bank and International Monetary Fund said humanitarian aid alone could exceed $300 million, excluding the cost of resettling refugees or of rebuilding Yugoslavia, if the conflict drags on through 1999.

The European Commission has tentatively estimated that the total cost of economic reconstruction of the region as a whole could reach $30 billion.