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Tuesday, 18th January 2005 (4300 views)

South Africa, the world's biggest gold producer, has given its backing to a British proposal to use IMF gold reserves in a bid to slash the debts of poor countries.<br/><br/>The proposal is part of a wide-ranging plan for poverty relief drawn up by chancellor Gordon Brown. He wants the International Monetary Fund (IMF) to use some of its gold reserves to write off $12 billion (£6.4 billion) of debt owed by the world's poorest countries.<br/><br/>Trevor Manuel, South Africa's Finance Minister, told Reuters that South Africa would be in favour of selling the institution's gold reserves, but needed an assurance that this could be achieved without swings in the price of the previous metal. <br/><br/>"We (as a global community) have done it before and can do it again, we shall do it again, but as a major gold producer we want to take part in the negotiations to ensure the price is managed," Mr Manuel said.<br/><br/>Brown wants donor countries to repatriate their share of World Bank and African Development Bank debts owed by developing countries - a process that Britain has already begun.<br/><br/>Under a 1971 agreement, the majority of the IMF's gold is just valued at between $40 and $50 an ounce - representing around a tenth of the current market price of more than $422.50 an ounce.<br/><br/>The IMF holds more than 100 million ounces of gold.<img src="http://directnews.dehavilland.co.uk/dn.gif?feedid=196&itemid=7591585"/>

 

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