The International Monetary Fund began selling off one-sixth of its gold stocks on Wednesday (2 June) as part of a four-year programme to dispose of 25 million ounces to help finance the trust fund.
This film is serviced with English speech by the IMF chairman, Mr. Johannes Wittiveen.
GV PAN EXTERIOR International Monetary Fund headquarters building (2 shots)
CU Mr. Johannes Wittiveen speaking
MV Prospective buyer makes secret bid
MV Fund officials dealing with secret bids (3 shots)
TRANSCRIPT: WITTIVEEN: "We do this because under the amendment of our articles of agreement, gold will have a different role in the future. In the past, gold was an official means of payment, countries had to make certain payments to the fund at an officially determined price. This has already changed. In fact, because in the markets, the gold price is very much higher than its official price. And therefore now in the amendments we phase out, or we reduce the role of gold in the system by abolishing the official price and abolishing official payments of gold to the fund. Therefore the gold that we have, and we have a very large stock of gold, is not so needed any more for the fund, for its payments and therefore we now use about one-sixth of this amount of gold to sell in the market and another sixth will be returned to our member countries."
Initials CL/2344 CL/2351
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Background: The International Monetary Fund began selling off one-sixth of its gold stocks on Wednesday (2 June) as part of a four-year programme to dispose of 25 million ounces to help finance the trust fund.
The fund is designed to make money available at extremely low interest rates to the poorest of developing nations to help them clear any deficits in their balance of payments.
The IMF offered 780,000 ounces for sale on Wednesday and early indications were that the bidding had attracted widespread interest among market professionals.
Prospective buyers offered sealed bids and these were opened and checked by fund officials.
Under the bid method chosen by the executive committee, all the successful bidders will pay the same price for the gold no matter what their bid. The price will be the lowest bid accepted by the fund.
It is thought the auction would provide the money to start the trust fund operating.