The International Monetary Fund’s (IMF) gold holdings have increased in value by USD $19.3 billion since the start of the global coronavirus pandemic, said Oxfam today.
This increase alone is equivalent to more than the total debt (USD $12.4 billion) owed this year by the poorest countries to multilateral institutions like the IMF and World Bank.
The value of the IMF’s gold holdings has jumped by 14 per cent in just four months from USD $138.2 billion in January to USD $157.6 billion in mid-April.
The agency is calling on the IMF to sell some of its gold holdings to expand debt relief and help poor countries fight the virus and save lives. Sixty-four countriesOpens a new window spend more on external debt payments than on public healthcare. Oxfam estimates that USD $19 billion could fund the salaries of 6.3 million nurses in Africa for one year.
The IMF’s gold bonanza coincides with investors clamoring for ‘safe-haven’ assets like government bonds and gold. According to the IMF, a record USD$100 billion has been pulled from emerging economies over the last two months —more than triple the amountOpens a new window during the same period at the start of the 2008 financial crisis.
The IMF has used revenues from gold sales in the past to provide debt relief to heavily indebted countriesOpens a new window, most of them in Africa.
Nadia Daar, Oxfam International’s Head of Washington DC Office, said, “Poor countries with fragile health systems are drowning in debt. With gold prices hitting a seven-year high, the IMF should use the windfall profits from gold sales for debt cancellation to avert catastrophic loss of life in developing countries.
“This week, the IMF, World Bank and G20 need to step up and agree to cancel all developing country debt payments for 2020 and commit to encouraging private creditors to get on board too. This would unlock billions of dollars that can pay for new hospitals and medical supplies and personnel to treat everyone who gets sick.”
Among the priorities outlined in a new statement to the IMF and World Bank released ahead of their Spring MeetingsOpens a new window, Oxfam is also calling on the IMF to issue at least US$1 trillion in additional international reserves, known as Special Drawing Rights, to dramatically increase the funds available to countries. Under current rules, this would give the Ethiopian government access to an additional $630 million —enough to increase its health spending by 45 percent.
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Notes to editors
- The World Bank and IMF 2020 Spring meetings will take place virtually from 16-17 April. G20 Finance Ministers and Central Bank Governors will meet virtually on 15 April.
- Oxfam calculated the increase in value of IMF gold holdings by comparing the change in gold prices per ounce (GC1:COM) from January 1, 2020 and April 13, 2020. With 90.5 million ounces, IMF’s holdings were valued at $138.2 billion on January 1, 2020 and $157.6 billion on April 13, 2020 —resulting in a gain of $19.3 billion. The price of gold goes up and down daily, but it has been steadily increasing since beginning of 2019. If looking at change in value since the last Spring Meetings (April 15, 2019), the value of IMF gold holdings has increased $40.8 billion.
- Download A Response Like No Other: Urgent Action needed by the International Financial InstitutionsOpens a new window.
- Download Dignity Not Destitution: An Economic Rescue Package for AllOpens a new window. This recently published report outlines how to tackle the coronavirus crisis and rebuild a more equal world.
- Download How to Confront the Coronavirus CatastropheOpens a new window, a five-point plan to enable poor countries to take action to prevent the spread of the coronavirus and build the capacity of health systems to care for those affected.
- Figures for Ethiopia from Development Finance International.
- Over 200 organizations, including Oxfam, have signed a statementOpens a new window calling for the cancellation of all debt payments due from developing countries to bilateral, multilateral and private creditors, and more than 750,000 people have signed a petitionOpens a new window calling for urgent debt relief.