Gold sales: funding debt relief or IMF bureaucracy?

6 March 2011

Preliminary IMF board discussions on the use of excess money generated through sales of part of the IMF’s gold reservesare awaited before the Fund’s spring meetings in mid April. Gold sales were completed in late December 2010, at a time of historically high gold prices, providing the Fund windfall profits of at least $2.8 billion more than projected in 2008, when the decision for gold sales was taken (see Update 60).

Fund staff indicated that discussion on the use of excess profits will be likely to centre on directing them to the Fund’s new income model (see Update 61) or keeping them as reserves, ignoring demands by civil society groups. In early April, more than 50 international and national civil society organisations called on the IMF board to direct “all excess windfall profits from gold sales to fund debt cancellation and/or non-debt creating assistance for poor countries.” The statement urges the board “to expand the criteria for the Fund’s new Post-Catastrophe Debt Relief Trust Fund to provide debt relief without harmful conditions to countries in crisis, and use the gold sales proceeds to fund it.”