How Much Gold Does the IMF Have?

How much gold does the IMF have

The IMF holds substantial gold reserves as international reserves to bolster financial strength and protect it against creditors’ claims.

In 1999-2000, the Fund sold one eighth of its gold reserves in order to finance debt relief efforts in Heavily Indebted Poor Countries (HIPCs).

The IMF keeps its gold stored at five locations: New York, London, Paris, Shanghai and Bombay.

1. The IMF’s Gold Holdings

IMF currently owns approximately 90.5 million ounces (2814.1 tons). Under certain strict conditions, however, this gold can only be sold under specific guidelines: to initiate such sales action by initiating it requires receiving approval by 85 percent of Executive Board votes; such a threshold ensures that a significant majority of world’s major economies oppose any sales attempt by initiating any sale proceedings at IMF.

However, the IMF’s gold reserves remain an invaluable source of strength to its balance sheet and an insurance against creditor claims on it. Even if it conducted modest sales to generate $10 billion for subsidy resources, such sales would only have minimal impacts on global markets.

Econometric analysis also suggests that increases in central bank reserves held as gold tend to coincide with geopolitical events and may be motivated by threats of sanctions from other nations (as can be seen from Table 13). Since 1999, countries subject to or threatened with sanctions have seen the largest annual increases in gold holdings at their central banks since 1999.

2. Gold Depositories

IMF gold is stored in designated depositories worldwide; most often this involves central banks that have offered to house it and meet all security requirements set out by the Fund.

At its founding, in 1944, member countries paid 25 percent of their initial quotas in gold; over time as their quotas expanded, so too did payments in this form.

Gold payments to the IMF were what allowed it to amass such vast holdings of this precious metal, estimated to be worth more than $90 billion at current prices.

IMF gold reserves are held in depository locations designated by Article XIII, Section 2, Rule F-1 of its Rules and Regulations. As stated here, five official locations were officially chosen but early drafts included Moscow, London and Shanghai as early drafts – although Shanghai was removed at an Executive Board meeting held in 1956. At market prices, IMF may sell or accept gold from countries for loan repayment purposes at market value.

3. The IMF’s Gold Sales

Instead of hoarding gold, the IMF sells it when necessary to member central banks as financing for short-term loans made to countries to help avoid or weather balance-of-payments crises. Interest charges on these loans enable it to earn its keep; and then proceeds are used to assist poor nations manage their finances more effectively to reduce poverty.

Since September 2009, the IMF has sold approximately 90.5 million ounces (2814.1 metric tons) of gold via on-market transactions – equivalent to approximately one eighth of their gold holdings at that time.

As part of its founding in 1944, members paid 25% of their initial quotas and subsequent increases in gold. Furthermore, members have historically paid some interest owed on IMF credit through gold payments, and often use gold settlement claims against it.

4. The IMF’s Gold Purchases

Central banks recently made headlines for purchasing gold at an unprecedented pace, partially as a reaction to US sanctions aimed at freezing Russia’s gold reserves and also because they recognize gold’s diversifying effects for currency reserves.

The Fund typically does not sell its gold holdings except under special circumstances. In 1999-2000, however, an exception was made: in order to support debt relief under the Heavily Indebted Poor Countries Initiative and avoid disrupting commercial markets with their sales; any subsequent profits generated were recorded as contributions towards Poverty Reduction and Growth Trust (PRGT).

The Fund monitors data on central bank gold purchases and sales, as well as gold’s share in official foreign exchange reserves. Our Gold Reserves Tracker dashboard requires login in order to access this data.

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