Gordon Brown urges IMF to revalue gold to finance debt relief.
Business Report Zambia
July 12, 2004

Gordon Brown has called on the International Monetary Fund (IMF) to boost the valuation of its gold reserves as a way to fund measures to relieve the debts of poor nations.
Brown, at the Vatican to boost his proposals for a $100 billion write-off of developing nation debt, said on Friday that revaluing the gold reserve could unlock "substantial sums".

Most of the IMF's gold is valued at the 1971 price of about $40 an ounce. Currently gold trades at about $400 an annouce. Any change in the valuation would have to be approved by the fund's shareholders, which are led by the Group of Seven industrial nations.

"To do more to complete the process of debt relief, we propose to the international community that we consider anew all options to finance further debt relief for the poorest countries, including making better use of IMF gold so that ... we can begin to provide multilateral debt relief up to 100 percent," Brown said in a speech at a conference in the Vatican on alleviating poverty around the globe.

A treasury official said these comments did not suggest the IMF should sell gold, only that it adjust the value of gold stock. Selling it could depress the price and hurt producing nations such as South Africa and Ghana.

Brown said: "If the IMF were to revalue the gold, it would most likely have very little impact on the market."

Last year Jubilee Research proposed using IMF gold reserves to finance debt relief in their report Can the World Bank and IMF afford to cancel 100% of Poor Country Debt?