The International Monetary Fund has approved the sale of a limited amount of its gold to shore up its finances and China, India and Russia have indicated interest in such purchases as a way of reducing their position in dollar-denominated securities.
The purchase of the gold will also help these countries to increase their role in IMF operations as they have complained the IMF is dominated by the United States, its largest shareholder, and European nations.
The fund’s executive board said it decided to sell “a volume strictly limited to 403.3 tonnes”, 1/8th of its holdings in a way that does not disrupt the sale of gold in commodity markets, which already were expecting and discounted the IMF decision.
The IMF, a 186-nation Washington-based lending organisation, is the third largest official holder of gold in the world with 3,217 tonnes after the United States and Germany.
The board said the IMF could sell its gold directly to its members’ central banks if any were interested or it could put the gold on the open market in phases.
If the gold is sold on the open market, the IMF said it would inform these markets before any sale begins and report regularly to the public on the progress of gold sales.