This Federal Reserve article reviews the uncommon instances in which countries have tapped valuation gains from gold and foreign-exchange reserves to raise funds. Over the past three decades, only five jurisdictions have done so: Germany, Italy, Lebanon, Curaçao and Saint Martin, and South Africa. The article identifies two primary uses for those valuation gains. Central banks in some cases employed the proceeds to offset operating losses (for example, Italy and Curaçao and Saint Martin). In other cases, governments redirected gains toward retiring existing public debt or easing fiscal stress (for example, South Africa, Lebanon, and Germany).
The potential magnitude of such a move in the United States is noteworthy. Revaluing the U.S. holding of roughly 261.5 million troy ounces of gold from the long-statutory price of $42.22 per ounce to contemporary market values near $3,300 per ounce would produce a very large notional gain; by one simple estimate, that uplift could be equivalent to about 3% of U.S. GDP. That calculation highlights why revaluation attracts attention whenever gold prices rise substantially over long-held account valuations.
However, the international record is mixed and contains important caveats. Revaluation proceeds can offer one-off fiscal or balance-sheet relief, but they are not a substitute for measures that address chronic fiscal or structural imbalances. In Lebanon, for example, the country continued to struggle with rising debt-to-GDP ratios even after using valuation gains. Germany’s attempt to capitalize on reserve revaluation met strong institutional and public resistance, underscoring the political economy limits of this option. In short, while revaluation can provide temporary breathing room, it frequently fails to solve underlying problems and may provoke legal, governance, or public-opinion challenges.
Practical considerations also matter. Accounting rules, statutory pricing, central-bank independence, and legal frameworks determine whether and how valuation gains can be realized and transferred to a government. Central banks that use valuation gains to plug operating losses risk obscuring the true state of their finances, while governments that rely on such windfalls to service debt may delay necessary fiscal reforms. The international examples show a range of governance arrangements and outcomes: some uses were limited and short-lived, others faced pushback, and in several cases the revaluations did not alter long-term fiscal trajectories.
Policymakers weighing reserve revaluation should therefore treat it as one-time, contingent revenue rather than a durable funding source. When used transparently and within robust institutional safeguards, conversion of valuation gains can be part of a broader toolkit to manage fiscal stress or central-bank balance sheets. But best practice demands clear accounting disclosure, adherence to legal limits, and a strategy that pairs any temporary relief with structural reforms to improve long-run fiscal sustainability.