The World Bank is an international financial institution that provides loans to developing countries around the world for capital programs. The World Bank has a stated goal of reducing poverty and to help people to help themselves and their environment by providing resources, capacity building and building partnerships in the public and private sector.
The developing countries are granted low interest loans, interest free credits and grants by the World Bank for their growth and prosperity. The loans provided by the World Bank are expended on variety of purposes which includes investment in education, health, nutrition, agriculture and environmental and natural resource management. The support, experience and advice that the World Bank officials bring along for projects or environment and social standards are also of dire significance.
World Bank has five departments, where each department is allocated a specific mission. First agency is of International Bank for Reconstruction and Development (IBRD) and second agency is of International Development Association (IDA). Their activities are persistent on developing countries, in fields such as human development, agriculture and rural development, environmental protection, infrastructure and governance.
The IBRD and IDA grant loans at privileged rates to member countries, as well as grants to the poor countries. Loans or grants for precise projects are often linked to wider strategy changes in the sector or the economy. For example, a loan to perk up coastal environmental management may be linked to expansion of new environmental institutions at national and local levels and the execution of new regulations to limit pollution.
International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) are the other two agencies whose chief focus is on investment in the private sector and they also offer insurance, whereas the fifth agency, International Centre for Settlement of Investment Disputes (ICSID), works to steadfastness the disputes between its member countries and provides support whenever needed.
Likewise, a rate increase makes the dollar stronger and devalues gold. In other words as the dollar’s exchange value decreases, it takes more dollars to buy gold, increasing the value of gold. The dollar is losing its value partly because of the large U.S. debt, which is nearly $ 12 trillion and thus the recent rise of gold prices.
World Bank is a renowned institution, which provides its services to more than 180 member countries. Its five agencies focus on eliminating poverty, and their aim is to raise the living standards of under developing countries. Besides, World Bank maintains gold prices in order to avoid high rates of poverty in developing countries.
Gold prices can relatively rise when the dollar declines. Most financial planners suggest not having more than 10% of your assets in gold because things do not always turn out they way you expect them to. It is vital to understand the intimate relationship between the value of gold and the dollar, and their respective indirect relationship, with The World Bank if you’re considering investing in gold and anticipating higher earnings post recession.