Gold Reserves at the International Monetary Fund
The IMF currently holds around 91 million ounces of gold in designated depositories, collected through initial quota subscriptions and various increases over the years.
Increases in gold reserves have historically coincided with political and economic uncertainty; however, this correlation can become complicated by sanctions imposed upon countries.
What is the IMF?
The International Monetary Fund is a global financial institution that keeps tabs on global and member country economies, lends money when countries need assistance (known as conditionality loans), and promotes economic development. It serves as an adjunct to World Bank Group which works directly with developing nations to reduce poverty and enhance shared prosperity.
IMF leadership includes both its Managing Director and Board of Governors, which are accountable for making most key decisions. The former serves a five-year term; each member country’s representative sits on this body.
The IMF derives its funding primarily from members through quotas that reflect each country’s economic size, and through New Arrangements to Borrow (NAB), which doubled in 2021, and bilateral borrowing agreements; together these resources make up its total lending capacity of nearly $1 trillion. Members requesting assistance must first submit a formal request to the IMF before undertaking an IMF-monitored program of economic policies.
How does the IMF spend its money?
As IMF gold sales have traditionally been used to provide debt relief for heavily indebted countries, global health funding remains scarce and over half of Africa’s 6.3 million nurses spend more on debt payments than salaries; Oxfam is calling on the IMF to use revenues from gold sales revenues as debt relief efforts to save lives.
The IMF is funded by its members who contribute a sum called a “quota subscription,” determined based on wealth and economic performance–the wealthier the country, the higher their quota is determined to be. Quotas serve as loanable funds and define each member’s voting power within the Fund.
Every year, the United States contributes approximately $83 billion to the IMF to cover its quota share. When pledged funds reach the IMF they are instantly invested or loaned out as necessary before being returned when borrowing members repay their loans to IMF.
What kind of research does the IMF do?
The IMF conducts extensive economic and financial research that contributes to its mission of helping members address problems and foster long-term prosperity. Research efforts are supported through contributions from member countries.
As well as tracking global developments, the IMF also provides loans and technical assistance to countries experiencing difficulty. Its resources come mainly from capital subscriptions (quotas) paid by its members at joining. Each subscription depends on a country’s relative wealth and economic performance.
IMF profits from gold sales help increase its capacity to offer concessional balance-of-payments loans to low-income countries. According to its Articles of Agreement, any proceeds earned from selling its gold are to be applied toward fulfilling “the purposes of the Fund.”
What is the IMF’s role in the world economy?
The IMF comprises 189 member countries organized into constituencies of four to 24. Each nation contributes a sum called quota subscription, which determines their borrowing rights and voting power in the Fund. Every year their quota subscriptions are adjusted in accordance with changes in economic conditions and each nation’s economic output.
The IMF’s managing director is accountable for overall management of the institution, serving a five-year term. She/he is assisted by a First Deputy Managing Director who also holds this office.
IMF gold sales are part of its new income model to strengthen long-term financing of the Fund and expand capacity to provide concessional loans to low-income members. Resources generated from gold sales will also enhance capacity to offer concessional loans on favorable terms.
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