Selling IMF Gold: A Lifeline for Climate-Hit Economies?
The International Monetary Fund is urged to sell 4% of its gold reserves to provide debt relief for low-income countries affected by climate catastrophes. Researchers propose using current high gold prices to replenish the Catastrophe Containment Relief Trust, covering more nations combatting climate crises.
The International Monetary Fund (IMF) is being urged to sell off 4% of its substantial gold reserves to provide debt relief to low-income countries reeling from climate-related disasters, a recent study suggests. As discussions on climate financing gain momentum at the COP29 summit, this proposal seeks to address the inadequacies of the current Catastrophe Containment Relief Trust (CCRT), which supports only 30 impoverished nations with $103 million.
According to researchers from Boston University's Global Development Centre, the CCRT's limited scope and funding do not accommodate the climate vulnerabilities faced by many countries. The recommendation is to sell a portion of the IMF's 90.5 million ounces of gold, leveraging elevated prices to bolster the fund significantly, providing relief to 86 countries.
While gold prices currently exceed $2,600 per ounce, a sale could generate $9.52 billion, replenishing the CCRT. However, such a move requires consensus among IMF's executive board and a commitment from member states to direct proceeds to the CCRT. Without conditionalities, researchers argue for emergency aid prioritizing vulnerable nations.
(With inputs from agencies.)
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