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International Monetary Fund Selling Eighth of its Gold Reserve

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Following the sale of 212 tons of gold to central banks, the IMF is moving ahead with sales on the gold market, phasing the sales so as to avoid market disruption.


In September 2009, the IMF’s Executive Board approved gold sales totaling 403.3 metric tons (12,965,649 troy ounces). Having already sold over half that amount to several central banks, the IMF is now looking to sell the remaining 191.3 tons of gold.


The IMF will continue to hold a substantial portion of its assets in gold. The sale of the full 403.3 metric tons would reduce the IMF’s gold holdings by about one-eighth.


“The top priority in conducting the gold sales is to avoid disruption to the gold market,” said Andrew Tweedie, Director of the IMF’s Finance Department. “Prior to any sales on the gold market, sales were first made exclusively to interested central banks, thus shifting gold within the official sector. Now the IMF will begin sales of the remaining gold on the market. This will be done in a phased way.”


Sales to date


Official interest in the IMF’s gold sales has proven substantial—at 212 tons thus far. The proceeds from these sales amount to almost $7.2 billion, or just over SDR 4.5 billion. The sales were conducted at market prices, and were allocated on a first-come, first-served basis to three central banks that expressed interest.


While the period set aside exclusively for official sales is now over, the IMF remains ready to respond to interest in gold from official holders.

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The IMF held 96.6 million ounces (3,005.3 metric tons) of gold at designated depositories at end January 2010. The IMF’s total gold holdings are valued on its balance sheet at SDR 4.4 billion (about $6.9 billion) on the basis of historical cost. As of February 1, 2010, the IMF's holdings amounted to $105.0 billion at current market prices.


A portion of these holdings was acquired after the Second Amendment of the IMF's Articles of Agreement in April 1978. This portion, which amounted to 12.97 million ounces (403.3 metric tons) prior to the sales agreed in September 2009, is not subject to restitution to IMF member countries (see below), unlike gold the IMF acquired before 1978. In September 2009 the Executive Board authorized the sale of this post-Second Amendment gold, and at end January 2010, a total of 191.3 metric tons of this portion of gold remained on the Fund’s books.


The IMF acquired the majority of its gold holdings prior to the Second Amendment through four main types of transactions.


* First, 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.

* Second, all payments of charges (interest on member countries' use of IMF credit) were normally made in gold.

* Third, 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.

* And finally, member countries could use gold to repay the IMF for credit previously extended.

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Section 1. Original members


The original members of the Fund shall be those of the countries represented at the United Nations Monetary and Financial Conference whose governments accept membership before December 31, 1945.

Section 2. Other members


Membership shall be open to other countries at such times and in accordance with such terms as may be prescribed by the Board of Governors. These terms, including the terms for subscriptions, shall be based on principles consistent with those applied to other countries that are already members.

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Section 1. Quotas and payment of subscriptions


Each member shall be assigned a quota expressed in special drawing rights. The quotas of the members represented at the United Nations Monetary and Financial Conference which accept membership before December 31, 1945 shall be those set forth in Schedule A. The quotas of other members shall be determined by the Board of Governors. The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository.

Section 2. Adjustment of quotas


( a ) The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned.


( b )The Fund may at any time propose an increase in the quotas of those members of the Fund that were members on August 31, 1975 in proportion to their quotas on that date in a cumulative amount not in excess of amounts transferred under Article V, Section 12(f)(i) and (j) from the Special Disbursement Account to the General Resources Account.


( c ) An eighty-five percent majority of the total voting power shall be required for any change in quotas.


( d ) The quota of a member shall not be changed until the member has consented and until payment has been made unless payment is deemed to have been made in accordance with Section 3( b ) of this Article.

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The United States has the most gold in the International Monetary Fund. It also has the most votes. Japan is 2nd. Germany is 3nd. UK and France tied for 4th. China is 5th. Italy is 6th. Saudi Arabia is 7th. Canada is 8th. Russia is 9th. Belgium is 10th.




The Board of Governors, the highest decision-making body of the IMF, consists of one governor and one alternate governor for each member country. The governor is appointed by the member country and is usually the minister of finance or the governor of the central bank. All powers of the IMF are vested in the Board of Governors. The Board of Governors may delegate to the Executive Board all except certain reserved powers. The Board of Governors normally meets once a year.




IMF Executive Directors and Voting Power


The Executive Board (the Board) is responsible for conducting the day-to-day business of the IMF. It is composed of 24 Directors, who are appointed or elected by member countries or by groups of countries, and the Managing Director, who serves as its Chairman. The Board usually meets several times each week. It carries out its work largely on the basis of papers prepared by IMF management and staff.

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The IMF tracks global economic trends and performance, alerts its member countries when it sees problems on the horizon, provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties.


Gold depositories of the Fund shall be established in the United States, the United Kingdom, France, and India. The gold of the Fund shall be held with the depositories designated by the members in whose territories they are located at places agreed with the Fund.


Adopted September 25, 1946, amended November 29, 1956, and April 1, 1978


The Fund may hold gold under earmark for members.


Adopted April 1, 1978

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