The International Monetary Fund announced on Monday the sale of 200 tons of gold to India's central bank, almost half the total sales volume of 403.3 tons that was approved by the Executive Board in September.
"I strongly welcome this transaction with the Reserve Bank of India," Managing Director Dominique Strauss-Kahn said in a statement. "This transaction is an important step toward achieving the objectives of the IMF's limited gold sales program, which are to help put the Fund's finances on a sound long-term footing and enable us to step up much-needed concessional lending to the poorest countries."
The transaction, which is in the process of being settled, involved daily sales that were phased over a two-week period during October 19-30, 2009, with each daily sale conducted at a price set on the basis of market prices prevailing that day.
The total sales proceeds are 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 action, 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.