How Much Gold Does the IMF Have?
IMF holds 2,814.1 tons of gold stored at designated depositories throughout the world, providing significant support to its balance sheet and protecting creditors’ claims against it. This holding provides essential insurance against creditor claims against it.
But there have been recent calls for the IMF to sell some of its gold in order to provide debt relief to low-income countries, but how much would that amount to and could disruption of the gold market be avoided?
1. It’s the World’s Third Largest Holder
At present, the IMF holds around 1.06 billion ounces of gold – enough to fill five Olympic-size swimming pools – accounting for one third of its current global stockpile.
Countries contribute resources to the IMF through payment of a quota that reflects their position in the global economy and sets their voting rights, supplemented with multilateral borrowing or bilateral loans.
IMF also maintains an international reserve asset called Special Drawing Rights (SDR), which can be exchanged for currencies among members freely and voluntarily. Its value is calculated using weighted average of several freely usable currencies.
The IMF strives to promote global economic stability and prevent international financial crises through monitoring macroeconomic imbalances and providing loans as financial firepower; while also aiding countries in correcting those imbalances through policy reform. Their policies are guided by decisions of their 190 member nations which are overseen collectively by its 24-member Executive Board with advice provided from two committees: International Monetary and Financial Committee and Development Committee.
2. It’s a Sign of Financial Strength
At its founding in 1944, member countries made initial payments into the IMF using gold as the means. Later, this could also be used as interest on loans extended by the Fund.
As soon as the gold standard was abandoned in 1973, the IMF stopped buying and selling gold directly – yet still held onto some as a symbol of financial strength and to safeguard its members against sovereign debt crises.
In April 1978, the Fund implemented its Second Amendment to its Articles, By-Laws and Rules and Regulations. This change dramatically revised and altered the entire set of rules and regulations; including deletion, rewriting and even renaming rules – such as Rule F-1 on gold depositories which needed amending as members no longer needed to pay subscriptions in gold.
IMF Executive Board approved sales strictly limited to gold acquired following the Second Amendment – totalling 403.3 metric tons (12,965,649 fine troy ounces). Since then, the IMF has sold off 212 metric tons to central banks before selling off any remaining 191.3 tons on the market; sales will take place gradually so as not to disturb global gold markets.
3. It’s a Sign of Stability
The International Monetary Fund is responsible for overseeing the global regime of exchange rates and payments that allows nations to conduct business among each other. A member country (there were 190 as of 2023) typically seeks IMF assistance when it cannot finance imports or pay its debts, usually indicative of serious economic crisis. While the Fund may try to mitigate such crises conditionally by supporting viable policies, ultimately each nation remains accountable for their own economic management. It obtains its funds principally through member quota contributions as well as multilateral and bilateral borrowing arrangements as funding sources.
Windfall profits from gold sales could contribute to low-income country lending, which the International Monetary Fund has pledged to do long term through the Poverty Reduction and Growth Trust (PRGT). Its financing package is currently aimed at raising additional resources to support low-interest concessional lending to low-income countries, while IMF members would contribute equivalent shares or contribute directly to PRGT as part of this financing package.
4. It’s a Sign of Growth
Just three blocks from the White House lies the IMF–an esteemed and invaluable global institution that’s becoming an invaluable ally to African and low-income country (LIC) nations as they work to promote growth and reduce poverty. IMF gold holds can be used to finance expanded PRGT lending as well as programs addressing pandemic and climate change threats while aiding LICs dealing with crises.
IMF holdings are an indicator of its financial strength and stability, accessible to its members as an economic and financial buffer against economic and financial stresses, geopolitical shocks, sanctions risks and sanctions risk. Furthermore, its diversified reserves provide essential liquidity for global economy while alleviating shortages of hard currencies in markets around the world; for example during pandemic outbreaks when gold sales from IMF helped support market liquidity requirements that needed meeting.
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