## Press Release: IMF Executive Board Approves Distribution of US$2.7 Billion in Remaining Windfall Gold Sales Profits as part of a Strategy to Make Low-Income Lending Sustainable

_IMF News, September 28, 2012_

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**Canonical URL:** [Press Release: IMF Executive Board Approves Distribution of US$2.7 Billion in Remaining Windfall Gold Sales Profits as part of a Strategy to Make Low-Income Lending Sustainable](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr12368)

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## Bibliographic details
- Published: September 28, 2012

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### Decision overview
- The Executive Board of the International Monetary Fund (IMF) approved the distribution of SDR 1.75 billion (US$2.7 billion) in remaining windfall gold sales profits.
- These resources are intended to bolster the IMF’s concessional lending vehicle for low-income countries, the Poverty Reduction and Growth Trust (PRGT), and make low-income lending sustainable.
- The resources are in addition to SDR 700 million (US$1.1 billion) previously approved for a separate operation supporting low-income countries during the global financial crisis.

### Rationale and expected impact
- The decision is framed as “a major step towards putting our important concessional lending operations for low-income members on a sustainable footing,” according to IMF Managing Director Christine Lagarde.
- The strategy aims to better position the IMF to help low-income members absorb future shocks and underpin efforts to achieve stronger and sustainable economic growth.
- The concessional lending to low-income members currently is at a zero interest rate.

### Distribution mechanics and conditions
- SDR 1.75 billion in reserves attributed to gold sales profits will be distributed to IMF member countries in proportion to their quota shares.
- The distribution will occur only when members have given satisfactory assurances that an amount equivalent to at least 90 percent of the distribution will be made available to the PRGT.
- An earlier distribution of SDR 700 million in reserves attributable to windfall gold sales profits was approved as part of a PRGT financing package agreed in 2009 to boost concessional lending capacity over the 2009-14 period.
- To date, assurances have been received that an amount equal to 87.4 percent of that SDR 700 million distribution will be made available to the PRGT; the actual distribution will be effected once the 90 percent threshold of assurances is reached.

### Historical gold sales and windfall profits
- The IMF sold 403.3 metric tons of gold in 2009-10 as part of a plan to ensure long-term financing of the IMF’s day-to-day operations through the creation of an endowment using anticipated profits of some SDR 4.4 billion (US$6.8 billion).
- High world gold prices during the sales period, over and above the US$850 an ounce envisaged when the sales were originally planned, generated “windfall” profits of some SDR 2.45 billion (about US$3.8 billion).
- With the Executive Board’s decision, the entire windfall profit has been approved for distribution in the context of strategies to support concessional lending to low-income members.

### Member engagement and appeals
- IMF Managing Director Christine Lagarde thanked and recognized member countries that have stepped up to support low-income members during the crisis.
- Ms. Lagarde called on IMF membership to demonstrate commitment again by completing the global effort to provide the resources for continued support in years to come.
- An up-to-date list of member countries’ pledges was noted as available online (not reproduced here).

### Key figures and statistics
- SDR 1.75 billion = US$2.7 billion (remaining windfall gold sales profits approved for distribution).
- SDR 700 million = US$1.1 billion (previously approved for a separate operation in 2009).
- SDR 4.4 billion = US$6.8 billion (anticipated profits used to create an endowment for long-term financing).
- SDR 2.45 billion ≈ US$3.8 billion (windfall profits generated by higher-than-expected gold prices).
- 403.3 metric tons (amount of gold sold in 2009-10).
- US$850 an ounce (gold price envisaged when sales were originally planned).
- 90 percent (assurances threshold required to trigger distribution to PRGT).
- 87.4 percent (assurances received so far for the SDR 700 million distribution).

*Press Release No. 12/368 — September 28, 2012*

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## References

- [Press Releases](https://www.imf.org/en/news/searchnews)
- [Transcript of a Background Briefing on Gold Profits Distribution for Low-Income Lending by the International Monetary Fund](https://www.imf.org/external/np/tr/2012/tr092812.htm)
- [PRESS CENTER](http://presscenter.imf.org/)
- [separate operation](https://www.imf.org/external/np/sec/pr/2009/pr09268.htm)
- [quota shares](https://www.imf.org/external/np/sec/memdir/members.htm)
- [Poverty Reduction and Growth Trust](https://www.imf.org/external/np/exr/facts/concesslending.htm)
- [here](https://www.imf.org/external/np/fin/prgt/index.htm)
- [zero interest rate](https://www.imf.org/external/pp/longres.aspx?id=4620)
- [IMF Gold Sales – Q&A](https://www.imf.org/external/np/exr/faq/goldfaqs.htm)
- [September 2012: Review of Facilities for Low-Income Countries](https://www.imf.org/external/np/sec/pn/2012/pn12108.htm)
- [IMF Survey Online July 2009: IMF Backs New Concessional Lending Package](https://www.imf.org/external/pubs/ft/survey/so/2009/pol072909a.htm)
- [FACTSHEET: Gold in the IMF](https://www.imf.org/external/np/exr/facts/gold.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr12368_