Gold Reserves at the International Monetary Fund

Gold reserves form an integral component of the IMF’s lending capacity, which relies heavily on quota resources and borrowing agreements with central banks.

Gold is stored at designated depository facilities that are set forth in the Fund’s Articles and Rules. Last amended in April 1978, Rule F-1 governs this aspect.

What is the IMF?

The IMF is an international institution tasked with overseeing the financial stability of its member nations. Comprised of 24 Executive Board members representing 24 member countries – each electing a governor (minister or central bank governor) and alternate governor for their country as representatives; its day-to-day work is carried out by staff led by an elected IMF Managing Director for a five year term;

Since losing its authority to regulate currency exchange rates, the IMF has transitioned into lending money to low-income countries through lending gold holdings of its holdings as collateral. Calls have emerged for IMF gold sales due to countries no longer linking their currencies to gold and cutting aid budgets; such sales would require approval by 85% of members; however, the United States can help rally international support for modest sales of IMF gold for benefit of sub-Saharan African nations and LICs, strengthening its global role and furthering national security and economic interests of both nations as well as U.S national security and economic interests of both.

How did the IMF get its gold?

IMF Gold was acquired from central banks and other official holders. The Executive Board decided on the terms for selling, reflecting the approach employed successfully by participating central banks participating in the IMF’s Central Bank Gold Agreement. Sales were strictly limited in order to place long-term Fund financing on solid foundations while profits will help expand capacity to provide concessional balance of payments assistance to low-income countries.

In 1999-2000, the IMF sold one eighth of its gold to fund debt relief for heavily indebted poor countries (HIPCs) under its Heavily Indebted Poor Countries Initiative and deposit the proceeds in its Special Disbursement Account (SDA).

The IMF cannot use its profits from these sales to purchase gold on the market as this would violate its Articles of Agreement. Only its Executive Board is permitted to approve gold sales with an 86% super majority vote being required before this sale may proceed.

Why does the IMF hold gold?

IMF gold holdings are governed by its Articles of Agreement as well as By-Laws, Rules and Regulations. Rule F-1 on Depositories provides guidance as to where assets such as gold are stored at.

After World War II, when the International Monetary Fund was founded, its articles mandated that all members establish par values for their currencies in terms of gold (or the US dollar, which was pegged to gold). Gold became thus a central element of this first international monetary system created through international agreement.

Oxfam has asked the IMF to sell some of its 90.5 million ounces of gold from before April 1978’s Second Amendment to its Articles in order to fund debt relief for Africa’s poorest countries, many of whom struggle to provide basic healthcare as well as contain Ebola which has claimed over 20,00 lives since that date. Oxfam believes this gold should go towards debt relief efforts for African states struggling against Ebola epidemic.

What is the IMF’s role in the gold market?

Gold has long been seen as an appealing investment asset, making it an integral component of central bank reserves. Our gold reserve dashboard monitors purchases and sales as well as the overall contribution from gold reserves.

Gold holdings of the IMF provide significant balancing strength to its balance sheet and satisfy creditor claims on it, yet since countries stopped linking currencies to gold during the 1970s IMF lending has increasingly been funded through quota resources and borrowing agreements rather than selling gold itself.

As legal title for the gold resides with the IMF, any IMF sales would need to be approved by an 85 percent majority of its Executive Board before proceeding with sales. One primary consideration would be minimizing disruption of the gold market as well as maximizing revenue for low-income countries; Oxfam estimates that modest IMF gold sales could provide enough funding to cover salaries for over 6 million nurses across Sub-Saharan Africa as well as other essential services.


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