News Brief: IMF Completes Off-Market Gold Sales

IMF News, April 7, 2000

Source details

Executive Board decision adopted on December 8, 1999, authorizing off-market gold sales by the IMF of up to 14 million troy ounces.
Objective: to generate the equivalent of SDR 2.226 billion (about US$3 billion) to help finance the IMF's contribution to debt relief and financial support for the world's poorest nations.

Announcement date: April 7, 2000.
Transactions conducted over the period December 14, 1999 through April 5, 2000.
Counterparties: seven off-market transactions conducted with Brazil and Mexico.
Quantity sold: a total of 12.944 million troy ounces of gold.
Proceeds equivalent: SDR 2.680 billion.
Mechanism: gold were sold and accepted back immediately at the same price, in settlement of these members' obligations to the IMF; thus, the gold sold by the IMF did not enter the market.

In accordance with the IMF's Articles of Agreement, the IMF retained the book value of the gold, equivalent to SDR 35 (about US$47) per troy ounce, on its own account.
The remainder of the proceeds, equivalent to SDR 2.226 billion, were invested to generate income for the Heavily Indebted Poor Countries (HIPC) Initiative.

IMF Treasurer Eduard Brau announced the accomplishment of the target and stated appreciation for the cooperation of the Brazilian and Mexican authorities, describing the transactions as "a major step toward funding the IMF's contribution to the HIPC Initiative."

International Monetary Fund. News Brief: IMF Completes Off-Market Gold Sales (April 7, 2000).