Gold played a central role in the international monetary
system until the collapse of the Bretton Woods system of
fixed exchange rates in 1973. Since then, its role has
diminished. But it remains an important asset in the reserve
holdings of several countries, and the IMF is still one of
the world’s largest official holders of gold. In line with
the new income model for the Fund agreed in April 2008,
funds from limited gold sales were used to establish an
endowment, and used to boost the IMF’s concessional lending
capacity to eligible low-income countries (LICs).
How the IMF acquired its gold holdings
The IMF holds around 90.5 million ounces (2,814.1 metric
tons) of gold at designated depositories. On the basis of
historical cost, the IMF’s total gold holdings are valued at
SDR 3.2 billion (about $4.8 billion), but at current market
prices, their value is closer to SDR 73.8 billion (about $113.2
The IMF has acquired its gold holdings through four main
- when the IMF was founded in 1944 it was decided that
25 percent of initial
quota subscriptions and subsequent quota increases were
to be paid in gold. This represents the largest source of
the IMF's gold.
payments of charges (interest on member countries' use
of IMF credit) were normally made in gold.
- a member wishing to acquire the currency of another
member could do so by selling gold to the IMF. The major use
of this provision was sales of gold to the IMF by South
Africa in 1970–71.
- member countries could use gold to repay the IMF for
credit previously extended.
The IMF’s legal framework for gold
Role of gold. The Second Amendment to the
Articles of Agreement in April 1978 fundamentally changed the
role of gold in the international monetary system by eliminating
its use as the common denominator of the post-World War II
exchange rate system and as the basis of the value of the
Special Drawing Right (SDR). It also abolished the official
price of gold and ended its obligatory use in transactions
between the IMF and its member countries. It furthermore
required the IMF, when dealing in gold, to avoid managing the
price of gold, or establishing a fixed price.
Transactions. The Second Amendment to the
Articles of Agreement limit the use of gold in the IMF’s
operations and transactions. The IMF may sell gold outright
according to prevailing market prices. It may accept gold in the
discharge of a member country's obligations (loan repayment) at
an agreed price, based on market prices at the time of
acceptance. Such transactions require Executive Board approval
by an 85 percent majority of the total
voting power. The IMF does not have the authority to engage
in any other gold transactions—such as loans, leases, swaps, or
use of gold as collateral—nor does it have the authority to buy
Over the last six decades of the IMF’s existence, there have
been several instances when the IMF has voted to return gold to
member countries, or to sell some of its holdings. The reasons
for this are varied: between 1957-70, the IMF sold gold on
several occasions to replenish its holdings of currencies.
During roughly the same period, some IMF gold was sold to the
United States and invested in U.S. Government securities to
offset operational deficits.
In December 1999, the Executive Board authorized off-market
transactions in gold of up to 14 million ounces to help finance
the IMF’s participation in the Heavily Indebted Poor Countries
(HIPC) Initiative. Most of the gold was sold in transactions
between the IMF and two members (Brazil and Mexico) that had
financial obligations falling due to the IMF.
The IMF’s strictly limited gold sales (2009-10)
On September 18, 2009, the Executive Board
approved the sale of 403.3 metric tons of gold (12.97
million ounces)—one-eighth of the Fund’s total holdings of gold
at that time. This move was part of a
new income model agreed in April 2008 to help put the IMF’s
finances on a sound, long-term footing. Key to this new income
model was the creation of an endowment funded by the profits
from the sale of this gold.
The first phase in the Fund’s gold sales was exclusively
off-market transactions to interested central banks and other
official holders, at market prices . In October and November
2009, the Fund sold 212 metric tons of gold in separate
off-market transactions to three central banks: 200 metric tons
were sold to the
Reserve Bank of India; 2 metric tons to the
Bank of Mauritius, and 10 metric tons to the
Central Bank of Sri Lanka.
In February 2010, the IMF
announced the beginning of sales of gold on the market. At
that time, a total of 191.3 tons of gold remained to be sold. In
order to avoid disrupting the gold market, sales were phased
over several months.
In December 2010 the IMF concluded the gold sales program
with total sales of 403.3 metric tons of gold (12.97 million
ounces). Total proceeds amounted to SDR 9.5 billion (about $14.4
billion), of which SDR 6.85 billion constituted profits over the
book value of the gold and SDR 4.4 billion of this was used to
establish an endowment as envisaged under the new income model.
In February 2012, the Executive Board
approved a distribution of SDR 700 million of reserves from
windfall gold sales profits (realized because of a higher gold
price than the assumed price when the new income model was
endorsed by the Executive Board), subject to assurances that at
least 90 percent of the amount would be made available for the
Poverty Reduction and Growth Trust (PRGT). This
distribution, which became effective in October 2012, was part
of a financing package endorsed by the Executive Board to boost
the IMF’s lending capacity.
In September 2012, the Executive Board approved a further
SDR 1,750 million of reserves from windfall gold sales
profits, subject to the same assurances that at least 90 percent
of the amount would be made available for the PRGT, to ensure a
longer-term sustainability of the PRGT. This distribution became
effective in October 2013.
The successful distributions of gold windfall profits were a
key step toward making the PRGT sustainable over the medium and
longer term. As a result of the additional subsidy resources
pledged, the PRGT now has sufficient capacity to accommodate
annual lending of about SDR 1¼ billion on average on an ongoing