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Camdessus favours

sale of some gold

reserves of IMF

ISLAMABAD: The International Monetary Fund (IMF) favours the sale of a small part of its gold reserves to help the least developing countries in reducing their debt burden, CNN reported on Monday.

The IMF Managing Director, Michael Camdessus told CNN, "I am ready to recommend sale of modest amount of gold around five million ounces which is more or less five percent of our gold reserves. " The IMF wanted to continue making low interest loans to the poorest countries during a much longer period of time, he added.

However, some countries including Germany and France are opposing the move.

Christian Aid (CA), a charity organization, is also in Washington to lobby ministers. "We would like to see the IMF selling perhaps 10 percent of its gold reserves ..... and to use that money to cancel the debts of the poorest countries," said Jessica Woodroffe of the CA.

The G-7 comprises finance ministers and central bank governors of Britain, Canada, France, Germany, Italy, Japan and the United States.

The G-7 is meeting in Washington to attend the annual spring summit of the IMF and the World Bank. The recent economic report "The World Economic Outlook" will also be discussed in the meeting, besides tackling the problem of heavily indebted countries.

WASHINGTON: IMF Director Michael Camdessus said on Monday evening that more money needs to be fed into the International Monetary Fund in order to deal with financial crises similar to the one in Mexico in late 1994.

Camdessus made his comments at the conclusion of a session of the IMF Interim Committee, the key political panel of the international organisation, during the first day of the two-day Spring meeting in Washington of the IMF and the World Bank.

The Mexico's fiscal crisis and the devaluation of its currency the peso, were prevented from spreading into an international conflagration by the IMF's sufficient supply of fluid funds, said Camdessus.

The IMF provided Mexico with 17 billion dollars in loans to help it deal temporarily with its balance of payment problems. It was the largest sum over loaned in the IMF's more than 50 years history.

Camdessus urged the 181-member countries of the IMF to agree to increased quotas in order to help the organisation deal with its liquidity problems.

He said a way must be found soon for the IMF to meet its goal of doubling its reserve funds to 52 billion dollars.

The major source of the reserve funds has been the then so called "richest" nations known as the group of Ten. However, they have been increasingly vocal in saying the IMF will have to tap other sources in order to bolster its resource funds.