IMF sells 10 tons of gold to Sri Lanka

WASHINGTON, Nov. 25 (Xinhua) -- The International Monetary Fund announced on Wednesday the sale of 10 tons of gold to Sri Lanka's central bank, part of the total sales volume of 403.3 tons that was approved by the Executive Board in September.

The latest sale "was conducted on the basis of market prices prevailing on November 23, 2009 with proceeds equivalent to 375 million dollars (SDR 234 million)," according to the IMF.

Earlier this month, the IMF have sold 200 tons of gold to India's central bank, with proceeds equivalent to 6.7 billion dollars or SDR 4.2 billion.

Under the IMF's Articles of Agreement, all gold sales must be conducted at prices based on market prices, including direct sales to official holders as in the case of this transaction.

The actions, authorized by the Group of 20 (G20) countries at their summit in London in April, mainly aimed at boosting the IMF's capacity to lend to poor countries.

The IMF, a 186-nation Washington-based lending institution, is the third-largest official holder of gold in the world after the United States and Germany.

In accordance with the guiding principle of avoiding disruption of the gold market, the IMF said its Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established.

In particular, the Fund is standing ready for an initial period to sell gold directly to central banks and other official holders that may be interested in such sales.

Thereafter, on-market sales of any amounts remaining from the 403.3 tons would be conducted in a phased manner over time, following the approach adopted successfully by central banks participating in the Central Bank Gold Agreement, according to the agency.

Meanwhile, the IMF also promised that it will inform markets before any on-market sales commence, and will report regularly to the public on progress with the gold sales.