Offshore Capitalist

The IMF’s strictly limited gold sales approved

On September 18, 2009, the Executive Board approved the sale of 403.3 metric tons of gold (12.97 million ounces), which amounts to one-eighth of the Fund’s total holdings of gold. In accordance with the priority of avoiding disruption of the gold market, the Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established.

This decision is a key step in implementing the new income model agreed in April 2008 to help put the IMF’s finances on a sound long-term footing. A central component of the new income model is the establishment of an endowment funded by the profits from the sale of a strictly limited portion of the Fund’s gold, being the gold the Fund has acquired after the Second Amendment of the Articles. In July 2009, the Executive Board agreed that resources linked to gold sales would also help boost the Fund’s concessional lending capacity.

In August 2009, the European Central Bank and other central banks announced the renewal of their agreement (Central Bank Gold Agreement) on gold sales, which are not to exceed 400 metric tons annually and 2,000 metric tons over the five years starting on September 27, 2009. The announcement notes that sales of 403 tons of gold by the IMF can be accommodated within these ceilings. This ensures that gold sales by the Fund would not add to the announced volume of sales from official sources.

via Factsheet — Gold in the IMF.

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