How Much Gold Does the IMF Have?
The IMF’s gold stock
After World War II, the IMF helped restore global monetary system through various means, one being a gold standard where countries established their currency’s par value relative to gold and paid all IMF-financed debt in gold.
IMF Articles stipulate that profits from gold sales must only be used for purposes consistent with IMF objectives, including supporting economic stability and growth through balance of payments support for members. Unfortunately, however, profits from such sales rarely end up being used due to risks they pose to market disruption and disinterest among IMF members in purchasing it.
Modest IMF gold sales could significantly bolster its global role, significantly benefiting Sub-Saharan African nations and other LICs as well as providing resources for projected PRGT subsidy needs. By marshalling international support behind this worthy goal, the United States could play an instrumental role.
The IMF’s gold holdings
IMF currently owns and deposits 90.5 million ounces of gold in designated depositories. When the Fund was first formed, members paid 25 percent of their initial quota subscription fees in gold – as well as depositing portions of subsequent quota payments in this precious metal.
In February 2012, the Executive Board authorized gold sales as a resource generation strategy to fund the Heavily Indebted Poor Countries debt relief initiative for LICs. Gold sales took place at market prices with any differences between book value and realized price recorded as profit and distributed accordingly among members; at least 90 percent was directed toward supporting PRGT’s work.
These transactions did not significantly alter global markets or cause changes to gold prices, and only involved the IMF gold acquired since April 1978 – equivalent to approximately 1/8th of total holdings at that point in time.
The IMF’s gold reserves
The IMF is a specialized agency of the United Nations that acts as one of the global stewards for international payments and exchange rates, helping nations do business between themselves. It promotes financial stability, facilitates economic growth and employment, and offers temporary financial aid to member nations experiencing balance of payment problems. With 190 member countries as members, its work extends far and wide.
Funded through subscription fees paid by member countries when joining, quota subscriptions reflect each country’s size of economy and determine its voting rights and borrowing abilities within the Fund; then they can be loaned out in times of financial need via short-term Stand-By Arrangements.
IMF operations are overseen by its board of governors and managed by senior staff. A managing director is appointed for five-year terms by the board; Christine Lagarde from France currently holds this post.
The IMF’s gold assets
The IMF holds an expansive gold holding, but its market value far surpasses its storage costs, prompting calls to sell some of their gold holdings to help finance pressing needs such as enhanced PRGT subsidies for low-income countries.
Recall that, during 1946 to the late 1970s, IMF gold assets were amassed through initial and increasing subscriptions and increases, as well as through other means like exchange of gold for currencies (such as during 1970s gold restitutions) or, in some low-income countries’ cases, as repayment for loans or as part of debt restructuring agreements.
Article XIII and Rule F-1 of the IMF provide guidance for where and how the Fund holds its gold assets. Initially, target percentages for distribution were specified; later amendments have made this more specific and precise.
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