By DPA,
Washington : Members of the International Monetary Fund have approved a broad expansion of investment practices as part of an overhaul of how the crisis lender acquires income.
The IMF Board of Governors voted Tuesday for the new investment strategy, which includes creating an endowment from the sale of more than 400 tonnes of gold reserves, worth more than $11 billion. The US Congress must still approve the transaction.
“With this decisive endorsement, the fund’s members have once again demonstrated their support for reforming key components of the institution’s framework, including its financial structure,” IMF Managing Director Dominique Strauss-Kahn said in a statement.
The IMF has until now relied primarily on income from its lending operations, but reduced demand for its loans from developing countries has led to a $400 million budget shortfall.
Strauss-Kahn said the new measures, which also include cutting spending by about 13.5 percent over the next three years, would put the IMF’s finances on a “sustainable footing” for the future.
Last month, the board approved a long-awaited reform of the IMF’s voting procedures, giving developing countries a small increase in influence.