In a written reply to a question from parliament, Manuel said he favoured including five-year quotas for gold sales allocated to central banks in 2004 for the process, as this would ensure the local gold mining industry was not affected.

"The National Treasury supports the use of IMF gold sales to finance debt relief for poor countries," he said.

The International Monetary Fund says it is studying proposals to use its gold reserves to fund more debt relief for poor countries after finance ministers from the Group of Seven industrial countries agreed to tackle the issue last month.

Manuel has been championing the cause of debt relief for impoverished nations — many of which are in sub-Saharan Africa.

Manuel pointed out that the IMF was obligated to ensure that its gold transactions did not disrupt the gold market.

"The sale of IMF gold when done in a managed manner that is transparent, clearly communicated...and ideally along the central bank gold agreement, will mean that the market can price in the IMF gold sales and thus cause no disruptions to the market price of gold," he said.

Fifteen European central banks signed a second International Gold Agreement in September 2004, limiting their total sales of gold to 2,500 tonnes over five years ending in 2009.

"The market has priced this fact into the calculation of the future price of gold. The IMF gold sales should therefore not depress the gold market and as a result the transaction should not adversly affect the local gold mining industry," Manuel said.