IMF Board Of Governors Approves Gold Sales, Income Reforms

WASHINGTON -(Dow Jones)- The International Monetary Fund has won approval from its board of governors on reforms to its income model that include the sale of more than $11 billion in gold.

The board, made up of finance ministers from the fund's 185 member countries, backed the changes by a comfortable margin, the IMF said in a news release Tuesday. All 176 of the countries who voted were in favor of the plan.

As part of its plan to get on more sustainable financial footing, the IMF plans to sell 403.3 tons of gold, or about an eighth of the fund's holdings. The money will be used to set up an interest-generating account to help close a projected $400 million budget deficit in coming years.

The sales aren't expected to hurt the gold market, since the IMF plans to either sell directly to a central bank, or gradually, as part of regular sales conducted by central banks in Europe and elsewhere.

The board of governors also approved an expansion of the fund's investment mandate.

The gold sales must be approved by the U.S. Congress, while the expanded investment regime also needs the backing of some other countries' legislatures before it can take effect.

"Together with the resounding vote last week to change the representational structure of the fund, this vote further reinforces the legitimacy of the fund," said IMF Managing Director Dominique Strauss-Kahn.

-By Tom Barkley, Dow Jones Newswires; (202) 862-9275; tom.barkley@dowjones.com

  (END) Dow Jones Newswires   05-06-081425ET   Copyright (c) 2008 Dow Jones & Company, Inc.