IMF - international monetary system

How much gold does the IMF hold?

.• The IMF holds 103.4 million ounces (3,217 metric tons) of gold, making it the third largest official holder of gold. The market value of this gold was $95.2 billion as of February 20, 2008. The gold is valued on its balance sheet at SDR (about $9.2 billion) on the basis of historical cost.

• Off-market transactions in gold (1999-2000). 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. Between December 1999 and April 2000, separate but closely linked transactions involving a total of 12.9 million ounces of gold were carried out between the IMF and two members (Brazil and Mexico) that had financial obligations falling due to the IMF. In the first step, the IMF sold gold to the member at the prevailing market price and the profits were placed in a special account invested for the benefit of the HIPC Initiative. In the second step, the IMF immediately accepted back, at the same market price, the same amount of gold from the member in settlement of that member's financial obligations. In the end, these transactions left balance of the IMF's holdings of physical gold unchanged.

Q. What is IMF policy on gold sales?

• The IMF has a systemic responsibility to avoid causing disruptions that would adversely impact gold holders and gold producers, as well as the functioning of the gold market.

• As the only asset with significant unrealized value, gold provides fundamental strength to the IMF's balance sheet. Any mobilization of IMF gold should avoid weakening IMF's overall financial position.