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The IMF holds a relatively large amount of gold among its assets, not only for reasons of financial

soundness, but also to meet unforeseen contingencies. The IMF holds about 90.5 million ounces, or 2,814.1 metric tons, of gold at designated depositories. The IMF's total gold holdings are valued on its balance sheet at about $4.9 billion (SDR 3.2 billion) on the basis of historical cost. The IMF's holdings amount to about $160 billion (as determined by end-February 2012 market prices). Gold and the international monetary system Gold played a central role in the international monetary system after World War II. The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates pegged in terms of the dollar and, in the case of the United States, the value of the dollar in terms of gold. This "par value system" ceased to work after 1971 Until the late 1970s, 25 percent of member countries' initial quota subscriptions and subsequent quota increases had to be paid for with gold. Payment of charges and repayments to the IMF by its members constituted other sources of gold. Use of Gold in the IMF The IMF's Articles of Agreement strictly limit the use of the gold following the Second Amendment in 1978. But in some circumstances, the IMF may sell gold or accept gold as payment from member countries. In September 2009, the IMF's Executive Board approved the total sale of 403.3 metric tons of gold as a key step in implementing the new income model to help put the IMF's finances on a sound long-term footing. The IMF sold this gold in two phases—the first phase was set aside exclusively for off-market sales to official holders. A total of 212 metric tons was sold during this first phase, comprising sales to theReserve Bank of India, the Bank of Mauritius, and the Central Bank of Sri Lanka. An additional amount was later sold to the Bangladesh Bank. In February 2010, the on-market phase of its gold sales program began. So as to avoid disruption to the gold market, these sales were phased over time. In December 2010, the IMF concluded the gold sales program with total sales of 403.3 metric tons of gold. Total proceeds amounted to about $15 billion (SDR 9.5 billion). Proceeds equivalent to the book value of the gold sold, about $4.2 billion (SDR 2.7 billion), were retained in the IMF's General Resources Account. Profits from the gold sales were invested in an income-generating fund to supplement IMF income. In February 2012, the Executive Board approved the distribution to all IMF member countries of about $1.1 billion (SDR 700 million) in reserves attributed to a portion of the windfall profits from recent IMF gold sales, with the expectation that member countries would return equivalent amounts to support concessional lending to low-income countries. The distribution will be effected only when members provide satisfactory assurances that they would make new Poverty Reduction and Growth Trust subsidy contributions equivalent to at least 90 percent of the amount distributed — i.e. about $1 billion (SDR 630 million). The selling of gold by the IMF is rare as it requires an Executive Board decision with an 85 percent majority of the total voting power. Prior to the recent sale of gold, the last time gold was sold by the institution was through off-market transactions completed in April 2001, with 12.9 million ounces traded. This transaction was approved by the membership as a means to finance the IMF's participation in the Heavily Indebted Poor Countries Initiative and the continuation of the Poverty Reduction and Growth Facility.