Lobbyist Group asks the IMF to Sell its Gold to Help Poor Countries

According to a report from Boston University’s Development Center, one solution could involve selling a portion of the IMF’s gold reserves, which currently amount to 90.5 million ounces.

The study suggests that selling just 4% of the IMF’s gold would generate $9.52 billion, which could be used to cover debt relief for 86 countries.

The International Monetary Fund should consider selling 4% of its gold to help alleviate the debt burdens of low-income countries devastated by climate disasters, according to the study, as climate finance takes center stage in the early discussions of the COP29 summit.

In recent years, low-income countries across regions like the Caribbean and Africa have turned to the IMF for assistance amid crises such as the COVID-19 pandemic, leading to an increase in repayments to this lender of last resort in subsequent years.

Although the IMF has a mechanism called the Catastrophe Containment and Relief Trust (CCRT), it only covers 30 poor countries and has just $103 million available, noted researchers from Boston University’s Global Development Policy Center.

The CCRT is designed to cover a member state’s IMF loan repayments for up to two years, providing immediate relief and allowing these countries to redirect funds to other critical needs.

“With gold prices currently exceeding $2,600 per ounce, selling a small fraction of the gold reserves could generate significant revenue and easily replenish the CCRT,” the study stated. As of Wednesday, gold was trading at $2,606.42 per ounce.

Sales of the IMF’s gold reserves are rare. The last major sale occurred in 2009-2010 when the IMF sold an eighth of its reserves to bolster its lending capacity.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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