Wednesday, 19th January 2005 (3071 views)

South Africa has backed UK proposals to use International Monetary Fund (IMF) gold reserves in a bid to slash third world debt.

Gordon Brown wants the IMF to use its gold reserves to write off $12 billion (£6.4 billion) of debt owed by the world's poorest countries.

South Africa is in favour of selling the institution's gold reserves, but needs assurances that this can be achieved without large price swings.

Mr Brown wants donor countries to follow in Britain's footsteps and cancel all World Bank and African Development Bank debts owed by developing countries.

The IMF holds more than 100 million ounces of gold, valued at between $40 and $50 an ounce due to a 1971 agreement.

This is around a tenth of the current market price of more than $422.50 an ounce.

 

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