Back Matter

Back Matter

International Monetary Fund
Published Date:
September 2000
    • ShareShare
    Show Summary Details


    Appendix I: International Reserves

    Total international reserves increased by 9 percent during 1999 and stood at SDR 1.6 trillion at the end of the year (Table I.1). This reflected an 11 percent increase in foreign exchange holdings, which constitute the largest component of international reserves (SDR 1.29 trillion). In contrast, IMF-related assets declined by 10 percent, to SDR 73 billion, resulting in a smaller overall increase of 9 percent in nongold reserves. The market value of gold reserves held by monetary authorities increased by 3 percent, to SDR 204 billion, at the end of 1999.1

    Table I.1Official Holdings of Reserve Assets1(In billions of SDRs)

    All countries
    Total reserves excluding gold
    IMF-related assets
    Reserve positions in the IMF31.736.738.047.160.654.854.3
    Subtotal, IMF-related assets47.556.456.567.681.073.272.5
    Foreign exchange811.3931.81,085.61,193.31,161.41,286.81,330,5
    Total reserves excluding gold858.7988.21,142.01,260.91,242.41,360.61,402.8
    Quantity (millions of troy ounces)915.4906.2904.0886.7966.1964.5960.7
    Value at London market price240.3235.8232.1190.7197.5204.0197.4
    Total reserves including gold1,099,11,224.01,374.21,451.61,439.91,564.01,600.2
    Industrial countries
    Total reserves excluding gold
    IMF related assets
    Reserve positions in the IMF27.431.632.641.353.946.846,4
    Subtotal, IMF-related assets39.946.647.156.869.861.560.7
    Foreign exchange393.9441.1501.7520.9475.8520.4532.3
    Total reserves excluding gold433.8487.7548.8577.7545.6581.9593.0
    Quantity (millions of troy ounces)768.0755.0748.2732.5808.7810.4807.0
    Value at London market price201.6196.4192.1157.5165.3171.4165.8
    Total reserves including gold635.5684.1740.9735.2710.9753.3758.8
    Developing countries
    Total reserves excluding gold
    IMF-related assets
    Reserve positions in the IMF4.
    Subtotal, IMF-related assets7.69.89.410.811.211.711.8
    Foreign exchange417.3490.7583.9672.5685.6766.4798.0
    Total reserves excluding gold424.9500.5593.2683.2696.8778.1809.8
    Quantity (millions of troy ounces)147.4151.2155.8154.2157.5154.1153.7
    Value at London market price38.739.340.
    Total reserves including gold463.6539.8633.3716.3729.0810.7841.3
    Net debtors
    Total reserves excluding gold
    IMF-related assets
    Reserve positions in the IMF2.
    Subtotal, IMF-related assets5.
    Foreign exchange299.3367.7448.1534.5545.4605.0630.5
    Total reserves excluding gold304.5375.0455.0542.6553.7613.7639.2
    Quantity (millions of troy ounces)120.8125.0129.4127.9131.0128.1127.6
    Value at London market price31.732.533.227.526.827.126.2
    Total reserves including gold336.2407.6488.2570.1580.5640.8665.4
    Countries without debt-servicing problems
    Total reserves excluding gold
    IMF-related assets
    Reserve positions in the IMF2.
    Subtotal, IMF-related assets3.
    Foreign exchange214.1272.8327.1400.3424.5484.1505.9
    Total reserves excluding gold217.8278.7332.4407.0431.6491.3513.2
    Quantity (millions of troy ounces)74.176.680.382.785.983.883.7
    Value at London market price19.519.920.617.817.617.717.2
    Total reserves including gold237.3298.6353.0424.8449.2509.0530.4
    Note: Components may not sum to totals because of rounding.Source: International Monetary Fund, International Financial Statistics.

    End-of-ycar figures for all years except 2000. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data arc available and certain other countries or areas.

    One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

    Foreign Exchange Reserves

    Foreign exchange reserves constituted 95 percent of non-gold reserve assets at the end of 1999. Developing countries’ foreign exchange reserves rose by 12 percent to SDR 766 billion, while foreign exchange reserves of industrial countries rose by 9 percent to SDR 520 billion. At the beginning of 1999, euro-area countries’ foreign exchange reserves were affected by the introduction of the euro as reserves denominated in euro legacy currencies2 were converted into euros and thus ceased to be foreign claims.

    Developing countries have steadily increased their share of foreign exchange holdings; at the end of 1999, they held 60 percent of total foreign exchange reserves. Foreign exchange reserves of oil-exporting developing countries increased by 13 percent during 1999. Net creditor developing countries’ foreign exchange reserves increased by 15 percent to SDR 161 billion, and those of net debtor countries rose by 11 percent to SDR 605 billion at the end of the year. Foreign exchange reserves of net debtor countries that have debt-servicing problems remained unchanged from the previous year, at SDR 121 billion, while those of countries without debt-servicing problems increased by 14 percent, to SDR 484 billion, at the end of 1999.

    Holdings of IMF-Related Assets

    During 1999, total IMF-related assets—which comprise reserve positions in the IMF and SDR holdings of all IMF members—fell by 10 percent, to SDR 73 billion at the end of the year, following annual increases of about 20 percent in the previous two years. The share of IMF-related assets in non-gold reserves has remained between 5 percent and 7 percent throughout the 1990s. At the end of 1999, members’ reserve positions in the IMF, which comprise their reserve tranche and creditor positions, stood at SDR 55 billion, and their SDR holdings stood at SDR 19 billion. The decline of 10 percent in IMF members’ holdings of SDRs reflects a shift of SDR 2 billion in SDR holdings to the IMF from its members. Industrial countries hold a majority of IMF-related assets: 84 percent at the end of 1999.

    Gold Reserves

    The market value of gold reserves was SDR 204 billion at the end of 1999 (a 3 percent increase over 1998). The physical stock of gold reserves held by monetary authorities declined marginally during 1999, but this was more than offset by an increase in the price of gold.3 The share of gold reserves has declined gradually from about 50 percent of total reserves in 1980 to 13 percent in 1999. In 1999, gold represented 23 percent of the total reserves of industrial countries, and only 4 percent of those of developing countries.

    Developments in the First Quarter of 2000

    During the first quarter of 2000, total reserve assets increased by SDR 36 billion, led by an increase in the foreign exchange reserves. IMF-related assets and the stock of gold reserves remained effectively unchanged. Because of a decline in the price of gold, however, the market value of gold reserves held by monetary authorities fell by SDR 7 billion.

    Currency Composition of Foreign Exchange Reserves

    The currency composition of foreign exchange reserves has changed gradually but fairly steadily over the past decade, with holdings of U.S. dollars, the dominant international reserve currency, rising to 66 percent of foreign exchange reserves at the end of 1999 from 51 percent at the beginning of the decade (Table I.2). In 1999, the euro was the second most important reserve currency, accounting for a 13 percent share. The share of the euro at the end of 1999 was 2 percentage points lower than the end-1998 combined share of the four euro legacy currencies identified in Table I.2: deutsche mark, French franc, Netherlands guilder, and private ecu. However, on January 1, 1999, the Eurosystem’s reserves previously denominated in euro legacy currencies became domestic assets of the euro area; hence, the 1998 data need to be adjusted before attempting to evaluate the development of the share of the euro since its introduction. On the basis of adjusted data (not shown in the tables), the combined share of these euro legacy currencies held outside the 11 euro-area countries in 1998 was practically identical to the share of the euro at the end of 1999.

    Table I.2Share of National Currencies in Total Identified Official Holdings of Foreign Exchange, End of Year1(In percent)
    All countries
    U.S. dollar50.651.155.156.456.456.860.162.165.766.2
    Japanese yen8.
    Pound sterling3.
    Swiss franc1.
    Deutsche mark16.815.113.013.414.013.512.812.612.1
    French franc2.
    Netherlands guilder1.
    Unspecified currencies37.
    Industrial countries
    U.S. dollar45.543.648.850.250.851.856.157.966.768.3
    Japanese yen8.
    Pound sterling1.
    Swiss franc0.
    Deutsche mark19.818.315.116.416.316.415.615.913.4
    French franc2.
    Netherlands guilder1.
    Unspecified currencies35.
    Developing countries
    U.S. dollar61.162.863.963.862.761.964.065.865.064.6
    Japanese yen6.
    Pound sterling5.
    Swiss franc1.
    Deutsche mark10.710.010.09.911.410.510.19.911.0
    French franc2.
    Netherlands guilder0.
    Unspecified currencies411.010.19.710.49.512.311.111.211.811.0
    Note: Components may not sum to total because of rounding.

    Note that ecus are treated as a separate currency. Only IMF member countries that report their official holdings of foreign exchange are included in this table; accordingly, the entries in this table cannot be calculated solely from the entries in Table I.3.

    Not comparable with the combined share of euro legacy currencies in previous years, part of which reflected holdings of the Eurosystem that became domestic assets, and thus were no longer recorded as foreign currency holdings, upon conversion into euros on January 1, 1999 (e.g., Germany’s holdings of French francs became holdings of domestic assets after their conversion into euros).

    The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of die reserves held in the currencies listed in the table

    The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

    Overall, the shares of continental European currencies and the Japanese yen in total reserve holdings declined during the 1990s, while the share of pound sterling gradually increased from 3 percent to 4 percent. The Japanese yen and Swiss franc had shares at the end of 1999 that were virtually unchanged from the previous year, at 5 percent and 1 percent, respectively. The share of unspecified currencies increased from 7 percent in 1990 to 12 percent in 1999; this category includes currencies not identified in Table I.2, as well as foreign exchange reserves for which no information on currency composition is available.

    In the calculation of currency shares, the ecu is treated as a separate currency. Ecu reserves held by the monetary authorities existed in the form of claims on both the private sector and the European Monetary Institute (EMI), which issued official ecus to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and U.S. dollar reserves. On December 31, 1998, the official ecus were unwound into gold and U.S. dollars; hence, the share of ecus at the end of 1998 was sharply lower than a year earlier. The remaining ecu holdings reported for 1998 consisted of ecus issued by the private sector, usually in the form of ecu deposits and bonds. On January 1, 1999, these holdings were automatically converted into euros.

    For industrial countries, the share of the U.S. dollar in foreign exchange reserves continued to increase, by 2 percentage points in 1999, to 68 percent of the total, a level not observed since the 1970s. The euro, which replaced 11 European national currencies and the ecu in January 1999, accounted for 11 percent of the foreign exchange reserves of industrial countries. The Japanese yen’s share in industrial countries’ currency holdings remained at about 6 percent, and that of the pound sterling was about 2 percent. In 1999, about 12 percent of the industrial countries’ foreign exchange holdings were in unspecified currencies.

    The U.S. dollar’s share in developing countries’ foreign exchange holdings has remained in the range of 61 percent to 65 percent throughout the 1990s. Fourteen percent of developing countries’ foreign exchange reserves were held in euros at the end of 1999, a 1 percentage point increase from the combined share of identified holdings of the euro’s legacy currencies for the previous year. The Japanese yen and pound sterling each had a share of 5 percent in developing countries’ foreign exchange holdings. The share of unspecified currencies has remained at a level of 10-12 percent since the mid-1980s.

    Changes in the SDR value of foreign exchange reserves can be decomposed into quantity and valuation (price) changes (Table I.3). Official reserves held in U.S. dollars increased by SDR 79 billion, which reflects an increase of SDR 61 billion in the quantity of U.S. dollar holdings and a valuation increase of SDR 18 billion. The SDR 28 billion increase in the quantity of euro holdings was partly offset by a price decline of SDR 18 billion, resulting in a net increase of SDR 10 billion from the combined share of the euro’s legacy currencies in reserves held outside the euro area in 1998. Despite a quantity decline of SDR 6 billion, a price increase of SDR 9 billion resulted in a net increase of SDR 3 billion in holdings of Japanese yen. An increase of SDR 6 billion in holdings of pound sterling mostly reflects a quantity change, since the valuation of pound sterling holdings did not change significantly during 1999. A quantity increase of SDR 2 billion in Swiss franc holdings was partly offset by an SDR 1 billion valuation decline in 1999.

    Table I.3Currency Composition of Official Holdings of Foreign Exchange, End of Year1(In millions of SDRs)
    U.S. dollar
    Change in holdings16,66937,69751,09532,69873,058121,12586,97918,22378,933
    Quantify change19,08825,08549,65657,30578,053103,24744,51648,25660,988
    Price change−2,41912,6131,439−24,607−4,99517,87942,463−30,03317,945
    Year-end value300,323338,020389,115421,813494,870615,996702,974721,198800,130
    Japanese yen
    Change in holdings5,155−3,4986,2256,0342522,941−1,972−1,4442,752
    Quantity change1,958−5,6159223,1353,2608,2981,091−5,791−5,794
    Price change3,1972,1175,3042,899−3,008−5,356−3,0634,3478,545
    Year-end value49,79946,30152,52758,56058,81261,75459,78258,33861,089
    Pound sterling
    Change in holdings1,959−3561,7324,1263,0827,3095,9151,5055,989
    Quantity change2,4913,2282,0814,2573,6693,2874,3973,1216,149
    Price change−532−3,584−348−132−5874,0221,518−1,616−160
    Year-end value18,72718,37120,10324,22827,31134,62040,53542,03948,028
    Swiss franc
    Change in holdings−133−4461,284−972226893125−87600
    Quantity change210−2541,382−1,411−5241,824232−1611,603
    Price change−344−192−99439750−930−10775−1,003
    Year-end value6,7826,3367,6206,6486,8747,7677,8927,8058,406
    Change in holdings9,8442
    Quantity change27,950
    Price change−18,106
    Year-end value150,956
    Deutsche mark
    Change in holdings−5.407−9,11112,76012,08212,69313,86311,760−10,565
    Quantity change−3,393−7,44618,5777,3846,32819,85621,984−14,420
    Price change−2,015−1,664−5,8174,6996,366−5,994−10,2243,855
    Year-end value88,90979,79892,558104,640117,334131,196142,957132,392
    French franc
    Change in holdings3,150−1,198−1681,9781,761−1,665−3,105−521
    Quantity change3,172−9708241,356510−1,062−1,876−896
    Price change−22−227−9916221,251−603−1,228375
    Year-end value16,82915,63115,46317,44119,20217,53614,43213,911
    Netherlands guilder
    Change in holdings222−2,168421−494−330−2651,064−603
    Quantity change309−2,163707−708−570−931,360−740
    Price change−86−4−287214240−172−296137
    Year-end value6,2124,0454,4653,9713,6413,3764,4403,837
    European currency unit
    Change in holdings5,360−498−2,8209591,665985−3,240−47,848
    Quantity change6,2833,8451,503−1,035−1,1571,833515−49,304
    Price change−923−1,342−4,3231,9942,822−849−3,7551,456
    Year-end value59,97159,47356,65457,61359,27860,26257,0229,174
    Sum of the above3
    Change in holdings26,97520,42470,53056,41092,406145,18697,525−41,33998,117
    Quantity change30,11715,70975,65370,28289,568137,19072,218−19,93490,896
    Price change−3,1424,715−5,123−13,8722,8397,99625,308−21,4047,221
    Year-end value547,551567,975638,504694,915787,321932,5071,030,033988,6941,068,610
    Total official holding4
    Change in holdings34,84627,39376,90561,071120,497153,795107,757−31,874125,360
    Year-end value645,895673,287750,193811,264931,7611,085,5561,193,3131,161,4391,286,799
    Note: Components may not sum to totals because of rounding.

    The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

    Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

    Each item represents the sum of the currencies above.

    Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

    Appendix II: Financial Operations and Transactions

    The tables in this appendix supplement the information in Chapter 6 on the IMF’s financial operations and policies.

    Table II.1Arrangements Approved During Financial Years Ended April 30, 1953–2000

    Number of ArrangementsAmounts Committed Under Arrangements

    (In millions of SDRs)
    Table II.2Arrangements in Effect at End of Financial Years Ended April 30, 1953–2000

    Number of Arrangements as of April 30Amounts Committed Under Arrangements

    as of April 30

    (In millions of SDKs)
    Table II.3Stand-By Arrangements in Effect During Financial Year Ended April 30, 2000(In millions of SDRs)
    MemberArrangement DatesAmounts ApprovedUndrawn Balance



    April 30, 1999
    In FY2000At date of

    As of

    April 30, 2000
    Bosnia and Herzegovina25/29/983/31/01613430
    Cape Verde1,42/20/983/15/00262
    El Salvador9/23/982/22/003838
    Papua New Guinea3/29/005/28/018676

    The authorities have indicated their intention not to draw under the arrangement.

    Extended from 5/28/99, 8/28/99, and 4/28/00. Augmented by SDR 17 million on 6/28/99 and SDR 17 million on 3/30/00.

    Brazil’s undrawn SRF (SDR 2.6 billion) expired on 12/1/99.

    Extended from 5/31/99 and 12/31/99. Augmented by SDR 0.4 million on 5/24/99.

    Extended from 3/31/00.

    Less than SDR 0.5 million.

    Table II.4Extended Arrangements in Effect During Financial Year Ended April 30, 2000(In millions of SDRs)
    MemberArrangement DatesAmounts ApprovedUndrawn Balance



    April 30,1999
    In FY2000At date of

    As of

    April 30, 2000
    Yemen, Rep. of610/29/973/1/0110666

    Replaced by a three-year Stand-By Arrangement on 3/10/2000.

    Extended from 12/19/99.

    The authorities have indicated their intention not to draw under the arrangement.

    Inoperative arrangement.

    Augmented by SDR 274 million on 5/27/99.

    Extended from 10/28/00.

    Table II.5Arrangements Under the Poverty Reduction and Growth Facility in Effect During Financial Year Ended April 30, 2000(In millions of SDRs)
    MemberArrangement DatesAmounts ApprovedUndrawn Balance



    April 30,1999
    In FY2000At date of

    As of

    April 30, 2000
    Burkina Faso9/10/999/9/023934
    Burkina Faso6/14/969/13/9940
    Central African Republic7/20/987/19/014933
    Congo, Republic of6/28/966/27/996956
    Côte d’lvoire3/17/983/16/01286162
    Gambia, The6/29/986/28/012114
    Kyrgyz Republic6/26/986/25/017338
    Macedonia, FYR4/11/974/10/005527
    Saã Tomé and Principe4/28/004/27/0377
    Yemen, Rep. of10/29/9710/28/00265115

    Augmented by SDR 9.74 million on 6/14/99.

    Extended from 1/24/00.

    Extended from 1/7/00.

    Augmented by SDR 5.55 million on 7/23/99. Extended from 7/26/99.

    Extended from 1/12/00.

    Extended from 11/26/99.

    Augmented by SDR 28.4 million on 3/27/00.

    Table II.6Summary of Disbursements, Repurchases, and Repayments, Financial Years Ended April 30, 1948–2000(In millions of SDRs)
    Financial YearDisbursementsRepurchases and RepaymentsTotal IMF


    Purchases1Trust Fund



    TotalRepurchasesTrust Fund



    Includes reserve tranche purchases.

    Excludes reserve tranche purchases.

    Table II.7Purchases and Loans from the IMF, Financial Year Ended April 30, 2000(In millions of SDRs)
    MemberReserve Tranche1Stand-By/Credit TrancheExtended Fund FacilityCCFFTotal PurchasesPRGF LoansTotal Purchases and Loans
    Bahamas, The999
    Bosnia and Herzegovina404040
    Burkina Faso1212
    Central African Republic88
    Gambia, The33
    Kyrgyz Republic55
    Macedonia, FYR141414
    Papua New Guinea101010
    Sierra Leone1621616
    St. Vincent111
    Yemen, Rep. of11112637

    Includes reserve tranche purchases made in connection with the use of the same-day SDR borrowing arrangements by members paying the reserve asset portion of their quota increases.

    Includes emergency postconflict assistance.

    Includes emergency natural disaster assistance.

    Includes Micronesia, which made a reserve tranche purchase of less than SDR 0.5 million.

    Table II.8Repurchases and Repayments to the IMF, Financial Year Ended April 30, 2000(In millions of SDRs)

    Credit Tranche

    Fund Facility
    CCFF and STFTotal

    SAF/PRGF and

    Trust Fund

    Total Repurchases

    and Repayments
    Bosnia and Herzegovina151515
    Burkina Faso66
    Central African Republic11
    Congo, Democratic Rep. of the111
    Congo, Republic of222
    Cote d’lvoirc1212
    Equatorial Guinea22
    Gambia, The33
    Kyrgyz Republic5516
    Lao People’s Dem. Rep.66
    Macedonia, FYR1131414
    Papua New Guinea171717
    Sierra Leone1818
    Slovak Republic8213030
    Sri Lanka7272
    Yemen, Rep. of353535

    SRF repurchase.

    Includes the Comoros, the Federal Republic of Yugoslavia (Serbia/Montenegro), Guinea-Bissau, Liberia, and São Tomé and Príncipe, which made repurchases/repayments of less than SDR 0.5 million.

    Table II.9Outstanding IMF Credit by Facility and Policy, Financial Years Ended April 30, 1992–2000(In millions of SDRs and percent of total)
    Millions of SDRs
    Stand-By Arrangements19,46910,5789,48515,11720,70018,06425,52625,21321,410
    Extended Arrangements8,6419,8499,56610,1559,98211,15512,52116,57416,808
    Supplemental Reserve Facility7,10012,655
    Compensatory and Contingency Financing Facility5,3224,2083,7563,0211,6021,3366852,8453,032
    Systemic Transformation Facility2,7253,8483,9843,9843,8693,3642,718
    Subtotal (GRA)23,43224,63525,53232,14036,26834,53949,70160,65143,968
    SAF Arrangements1,5001,4841,4401,2771,208954730565456
    PRGF Arrangements21,6462,2192,8123,3184,4694,9045,5055,8705,857
    Trust Fund1581581051029590908989
    Percent of total
    Stand-By Arrangements1353732414945463843
    Extended Arrangements323432282428222533
    Supplemental Reserve Facility1319
    Compensatory and Contingency Financing Facility201512843146
    Systemic Transformation Facility910910755
    Subtotal (GRA)878685878685899087
    SAF Arrangements655332111
    PRGF Arrangements26899111210912
    Trust Fund113333333

    Includes outstanding credit tranche and emergency purchases.

    Includes outstanding associated loans from the Saudi Fund for Development.

    Less than 1/2 of 1 percent of total.

    Table II.10Poverty Reduction and Growth Facility, Estimated Value of Contributions (Commitments as of April 30, 2000)(In millions of SDRS)
    ContributorSubsidies (Grant or Grant Equivalent)1Loans2
    Prior to


    TotalPrior to


    Czech Republic1313
    Iran, Islamic Republic of22
    United Kingdom28078358
    United States14824172
    Subtotal (Bilateral)2,20441,2093,4134,9416,342
    OPEC Fund538
    Special Disbursement Account592592
    Saudi Arabia6161650

    The amounts reported for grant contributions are the “as needed” equivalent of the resources committed, or implicit in loans or deposits at concessional interest rates. The calculations are based on actual interest rates through end-April 2000 and an assumed rate of 5.0 percent a year thereafter. Grants committed in local currency are valued at April 30, 2000 exchange rates.

    Loan contributions are provided either at concessional interest rates or on the basis of weighted averages of market interest rates in the currencies comprising the SDR basket.

    The ESAF Trust, predecessor to the PRGF Trust, was enlarged and extended effective February 23, 1994.

    The sum of individual contributions has been adjusted downward to take into account additional loan costs.

    The SDR equivalent of US$50 million valued at the exchange rate of end-April 2000.

    Corresponds to loans under the associated loan agreement with the Saudi Fund for Development (SFD) at an interest rate of 0.5 percent a year.

    Table II.11PRGF-HIPC Trust, Estimated Value of Pledged Bilateral Contributions (Commitments as of April 30, 2000)

    (In millions of SDKs “as needed”)1

    Major industrial countries880.5
    United Kingdom82.2
    United States332.6
    Other advanced countries299.9
    New Zealand1.8
    San Marino0.05
    Fuel-exporting countries88.3
    Brunei Darussalam0.1
    Iran, Islamic Republic of2.2
    Saudi Arabia53.5
    Trinidad and Tobago1.6
    United Arab Emirates3.8
    Other developing countries175.0
    Dominican Republic0.5
    Micronesia, Federated States of0.00001
    South Africa28.6
    Sri Lanka0.6
    St. Lucia0.1
    St. Vincent and the Grenadines0.1
    Countries in transition44.2
    Czech Republic4.1
    Slovak Republic4.0
    Other contributors74.9
    Total (93 contributors)1,562.9

    The term “as needed” refers to the nominal undiscounted sum of the assumed time profile of resources required by the PRGF-HIPC Trust for the delivery of HIPC assistance and subsidies related to interim PRGF lending. The value of a contribution in “as needed” terms is estimated taking into account the timing of its availability in relation to the timing of the resource requirements of the PRGF HIPC Trust. All calculations are based on an SDR interest rate assumption of 5 percent a year.

    Table II.12Special One-Time Allocation of SDRs Pursuant to Schedule M of the Proposed Fourth Amendment to the Articles of Agreement(In SDRs)



    Afghanistan, Islamic State of26,703,0008,593,210
    Antigua and Barbuda02,491,842
    Bahamas, The10,230,00017,590,684
    Bosnia and Herzegovina20,481,25215,049,484
    Brunei Darussalam043,973,683
    Burkina Faso9,409,0003,548,579
    Cape Verde620,0001,432,105
    Central African Republic9,325,0002,753,105
    Congo, Democratic Republic of the286,309,00029,429,734
    Congo, Republic of9,719,0007,254,842
    Costa Rica23,726,00011,159,789
    Côte d’lvoirc37,828,00032,002,209
    Czech Republic0172,845,891
    Dominican Republic31,585,00014,968,473
    El Salvador24,985,00011,835,631
    Equatorial Guinea5,812,0001,311,737
    Gambia, The5,121,0001,592,316
    Iran, Islamic Republic of244,056,00072,114,782
    Kyrgyz Republic018,908,684
    Lao People’s Democratic Republic9,409,0002,053,473
    Macedonia, former Yugoslav Republic of8,378,6946,161,937
    Marshall Islands0732,895
    Micronesia, Federated States of01,026,053
    New Zealand141,322,00049,259,943
    Papua New Guinea9,300,00018,637,947
    St. Kirts and Nevis01,905,526
    St. Lucia741,6002,483,137
    St. Vincent and the Grenadines353,6001,405,347
    San Marino02,931,579
    Sāo Tomé and Príncipe620,000992,368
    Saudi Arabia195,526,8001,308,549,061
    Sierra Leone17,455,0005,176,789
    Slovak Republic075,458,840
    Solomon Islands654,4001,544,284
    South Africa220,360,000179,917,780
    Sri Lanka70,868,00018,134,735
    Syrian Arab Republic36,564,00024,969,841
    Trinidad and Tobago46,231,00026,120,367
    United Arab Emirates38,736,80076,210,408
    United Kingdom1,913,070,000260,578,477
    United States4,899,530,0002,877,010,667
    Yemen, Republic of28,743,00022,999,367
    Yugoslavia, Federal Republic of (Serbia/Montencgro)256,664,79741,660,359

    Participants as of September 19, 1997, will receive a special one-time allocation of SDRs in an amount that will result in their cumulative allocations of SDRs being equal to 29,315788813 percent of their Ninth General Review quota.

    These countries currently have Eighth General Review quotas. The Federal Republic of Yugoslavia (Serbia/Montenegro) has not completed arrangements for succession to membership and is not currently a participant in the SDR Department.

    A country that becomes a participant in the SDR Department after September 19, 1997, and within three months of its membership in the IMF will receive a special one-time allocation of SDRs based on a notional Ninth General Review quota. Palau, which became a member and a participant in the SDR Department in December 1997 with an initial quota of SDR 2.25 million, will be entitled to receive a special one-time allocation of SDR 659,605.

    Table II.13Summary of Transactions and Operations in SDRs, Financial Year Ended April 30, 2000(In thousands of SDRs)


    April 30, 1999

    from the




    to the







    Positions as at April 30, 2000
    Receipts from

    Participants and

    Prescribed Holders
    Transfers to

    Participants and

    Prescribed Holders


    Holdings as

    percent of


    Afghanistan, Islamic State of26,703
    Antigua and Barbuda55
    Bahamas, The899,1958,8508,9578,850–35918110,2301.8
    Bosnia and Herzegovina16601135,50025,88614,329−4886,34120,48131.0
    Brunei Darussalam3,0139031194,035
    Burkina Faso492250219276–3154849,4095.1
    Cape Verde345–2186201.2
    Central African Republic958,6058,283229–3271029,3251.1
    Congo, Democratic Republic of the86,309
    Congo, Republic of1076353575319–3411229,7191.3
    Costa Rica153400986–82571423,7263.0
    Cote d’lvoire3642,2501,1442,006–1,3122,16437,8285.7
    Czech Republic101102
    Dominican Republic8702,910171,618–1,1011,07731,5853.4
    El Salvador24,9814439–424,98124,985100.0
    Equatorial Guinea5721661–204645,8121.1
    Gambia, The1632,9502,61826–1713515,1216.9
    Iran, Islamic Republic of2,341206,0351,00043–7,923199,496244,05681.7
    Kyrgyz Republic8,6871,5191206,2932331,229
    Lao People’s Democratic Republic2,8143,8005,444–2758959,4099.5
    Macedonia, former Yugoslav Republic of194517,08113611214,955–2722,7758,37933.1
    Marshall Islands
    Micronesia, Federated States of1,034400400400400371,070
    New Zealand1,6529,249–4,8566,045141,3224.3
    Papua New Guinea3011,4711,102–32310,0759,300108.3
    St. Kitts and Nevis6666
    St. Lucia1,482261,509742203.4
    St. Vincent and the Grenadines64575575585575–106335417.9
    San Marino44032121458979
    São Tomé and Príncipe623–2276201.1
    Saudi Arabia89,77731,233−2,564118,446195,52760.6
    Sierra Leone7,1505,91822,26715,917511–4265,78217,45533.1
    Slovak Republic3,6583,6502616,436441,176
    Solomon Islands12212–2336540.4
    South Africa210,34911,000895913–888220,479220,360100.1
    Sri Lanka78575,00072,760774–2,4061,39370,8682.0
    Syrian Arab Republic51929686–1,28538136,5641.0
    Trinidad and Tobago4501,72537–1,62358946,2311.3
    United Arab Emirates59,3753154,900–2634,24238,73711.0
    United Kingdom265,485300,000370,538107,513–57,196245,2641,913,07012.8
    United States7,129,55539,37539,375458,61284,6437,672,8104,899,530156.6
    Yemen, Republic of140,83312,94018,3737825,1473,942114,27328,743397.6
    Yugoslavia, Federal Republic of (Serbia/Montenegro)156,665
    Total participants17,391,1916,993,2366,500,8777,357,3016,953,134–146,38218,141,33521,433,33084.6
    Prescribed holders
    Arab Monetary Fund47,11392,023118,06937321,439
    Bank of Central African States8,4441,6007,4041822,822
    Bank for International Settlements499,419529,056989,765584,92517,541641,341
    East African Development Bank1837190
    Eastern Caribbean Central Bank2,252802,332
    International Bank for Reconstruction and Development2,239802,319
    Islamic Development Bank2,645942,739
    Total prescribed holders562,294622,8451,115,204584,92518,321673,181
    General Resources Account3,571,9676,953,1347,547,876–394,350141,0172,723,892

    The assets and liabilities of the former Socialist Federal Republic of Yugoslovia were assumed by five successor states. As of April 30, 2000, the Federal Republic of Yugoslavia (Serbia/Montenegro) had not completed arrangements for succession to membership in the IMF.

    Table II.14Holdings of SDRs by All Participants and by Groups of Countries as Percent of Their Cumulative Allocations of SDRs, at End of Financial Years Ended April 30, 1991–2000
    Nonindustrial Countries2
    Net debtor countries
    Financial YearAll Participants1Industrial Countries2All nonindustrial countriesNet creditor countriesAll net debtor countriesHeavily indebted poor countries

    Member countries that are participants in the SDR Department. At the end of FY2000, of the total SDRs allocated to participants in the SDR Department (SDR 21.4 billion), SDR 3.4 billion was not held by participants but instead by the IMF and prescribed holders.

    Based on IFS classification (International Monetary Fund, International Financial Statistics, various years).

    Table II.15Key IMF Rates, Financial Year Ended April 30, 2000(In percent)

    SDR Interest

    Rate and

    Unadjusted Rate

    of Remuneration1
    Basic Rate

    of Charge1
    May 13.243.68
    May 33.293.73
    May 103.323.77
    May 173.343.79
    May 243.333.78
    May 313.343.79
    June 73.313.76
    June 143.353.80
    June 213.343.79
    June 283.393.85
    July 53.343.79
    July 123.353.80
    July 193.343.79
    July 263.323.77
    August 23.363.81
    August 93.383.84
    August 163.363.81
    August 233.383.84
    August 303.453.92
    September 63.423.88
    September 133.373.82
    September 203.333.78
    September 273.383.84
    October 43.544.02
    October 113.564.04
    October 183.674.17
    October 253.694.19
    November 13.724.22
    November 83.754.26
    November 153.764.27
    November 223.774.28
    November 293.784.29
    December 63.794.30
    December 133.784.29
    December 203.884.40
    December 273.904.43
    January 33.814.32
    January 103.864.38
    January 173.894.42
    January 243.924.45
    January 314.034.57
    February 74.084.63
    February 144.094.64
    February 214.144.70
    February 284.184.74
    March 64.164.72
    March 134.204.77
    March 204.224.79
    March 274.244.81
    April 34.224.79
    April 104.244.81
    April 174.234.80
    April 244.254.82
    April 304.254.82

    Under the FY2000 decision on burden sharing, the rate of remuneration was adjusted downward and the rate of charge adjusted upward to share the burden of protecting the IMF’s income from overdue charges and of contributing to the IMF’s precautionary balances. The amounts generated from burden sharing in FY2000 are refundable when overdue charges are paid and when overdue obligations cease to be a problem. The basic rate of charge presented is the effective rate following the retroactive reduction implemented after the end of the financial year. The basic rate of charge, set at 113.7 percent of the SDR interest rate, was reduced to 113.5 percent of the SDR interest rate as a result of the retroactive reduction.

    Table II.16Members’ Quotas in the IMF, April 30, 20001(In millions of SDRs)
    Afghanistan, Islamic State of2120.4
    Antigua and Barbuda13.5
    Bahamas, The130.3
    Bosnia and Herzegovina169.1
    Brunei Darussalam3150.0
    Burkina Faso60.2
    Cape Verde9.6
    Central African Republic55.7
    Congo, Democratic Republic of the2291.0
    Congo, Republic of84.6
    Costa Rica164.1
    Côte d’Ivoire325.2
    Czech Republic819.3
    Dominican Republic218.9
    El Salvador171.3
    Equatorial Guinea32.6
    Gambia, The31.1
    Iran, Islamic Republic of1,497.2
    Kyrgyz Republic88.8
    Lao People’s Dem. Rep.339.1
    Macedonia, FYR68.9
    Marshall Islands32.5
    Micronesia, Federated States of5.1
    New Zealand894.6
    Papua New Guinea131.6
    San Marino17.0
    Säo Tome and Principe7.4
    Saudi Arabia6,985.5
    Sierra Leone103.7
    Slovak Republic357.5
    Solomon Islands10.4
    South Africa1,868.5
    Sri Lanka413.4
    St. Kitts and Nevis8.9
    St. Lucia15.3
    St. Vincent and the Grenadines8.3
    Syrian Arab Republic293.6
    Trinidad and Tobago335.6
    United Arab Emirates611.7
    United Kingdom10,738.5
    United States37,149.3
    Yemen, Republic of243.5

    Board of Governors Resolution No. 53-2, adopted January 30, 1998.

    Member has overdue financial obligations to the General Resources Account and consequently cannot consent to its quota increase under Resolution No. 53-2.

    Member has not consented to its quota increase under Resolution No. 53-2.

    Table II.17Members That Have Accepted the Obligations of Article VIII, Sections 2, 3, and 4 of the Articles of Agreement
    MemberEffective Date

    of Acceptance
    AlgeriaSeptember 15, 1997
    Antigua and BarbudaNovember 22, 1983
    ArgentinaMay 14, 1968
    ArmeniaMay 29, 1997
    AustraliaJuly 1, 1965
    AustriaAugust 1, 1962
    Bahamas, TheDecember 5, 1973
    BahrainMarch 20,1973
    BangladeshApril 11, 1994
    BarbadosNovember 3, 1993
    BelgiumFebruary 15, 1961
    BelizeJune 14, 1983
    BeninJune 1, 1996
    BoliviaJune 5, 1967
    BotswanaNovember 17, 1995
    BrazilNovember 30, 1999
    Brunei DarussalamOctober 10, 1995
    BulgariaSeptember 24, 1998
    Burkina FasoJune 1, 1996
    CameroonJune 1, 1996
    CanadaMarch 25, 1952
    Central African RepublicJune 1, 1996
    ChadJune 1, 1996
    ChileJuly 27, 1977
    ChinaDecember 1, 1996
    ComorosJune 1, 1996
    Congo, Republic ofJune 1, 1996
    Costa RicaFebruary 1, 1965
    Côte d’IvoireJune 1, 1996
    CroatiaMay 29, 1995
    CyprusJanuary 9, 1991
    Czech RepublicOctober 1, 1995
    DenmarkMay 1, 1967
    DjiboutiSeptember 19, 1980
    DominicaDecember 13, 1979
    Dominican RepublicAugust 1, 1953
    EcuadorAugust 31, 1970
    El SalvadorNovember 6, 1946
    Equatorial GuineaJune 1,1996
    EstoniaAugust 15, 1994
    FijiAugust 4, 1972
    FinlandSeptember 25, 1979
    FranceFebruary 15, 1961
    GabonJune 1, 1996
    Gambia, TheJanuary 21, 1993
    GeorgiaDecember 20, 1996
    GermanyFebruary 15, 1961
    GhanaFebruary 21, 1994
    GreeceJuly 7, 1992
    GrenadaJanuary 24, 1994
    GuatemalaJanuary 27, 1947
    GuineaNovember 17,1995
    Guinea-BissauJanuary 1, 1997
    GuyanaDecember 27, 1966
    HaitiDecember 22, 1953
    HondurasJuly 1, 1950
    HungaryJanuary 1, 1996
    IcelandSeptember 19,1983
    IndiaAugust 20, 1994IndonesiaMay 7,1988
    IrelandFebruary 15, 1961
    IsraelSeptember 21, 1993
    ItalyFebruary 15, 1961
    JamaicaFebruary 22, 1963
    JapanApril 1, 1964
    JordanFebruary 20, 1995
    KazakhstanJuly 16, 1996
    KenyaJune 30, 1994
    KiribatiAugust 22, 1986
    KoreaNovember 1,1988
    KuwaitApril 5, 1963
    Kyrgyz RepublicMarch 29, 1995
    LatviaJune 10, 1994
    LebanonJuly 1, 1993
    LesothoMarch 5, 1997
    LithuaniaMay 3, 1994
    LuxembourgFebruary 15, 1961
    Macedonia, FYRJune 19, 1998
    MadagascarSeptember 18, 1996
    MalawiDecember 7, 1995
    MalaysiaNovember 11, 1968
    MaliJune 1, 1996
    MaltaNovember 30, 1994
    Marshall IslandsMay 21, 1992
    MauritaniaJuly 19, 1999
    MauritiusSeptember 29, 1993
    MexicoNovember 12, 1946
    Micronesia, Federated States ofJune 24, 1993
    MoldovaJune 30, 1995
    MongoliaFebruary 1, 1996
    MoroccoJanuary 21, 1993
    NamibiaSeptember 20, 1996
    NepalMay 30, 1994
    NetherlandsFebruary 15, 1961
    New ZealandAugust 5, 1982
    NicaraguaJuly 20, 1964
    NigerJune 1, 1996
    NorwayMay 11, 1967
    OmanJune 19, 1974
    PakistanJuly 1, 1994
    PalauDecember 16, 1997
    PanamaNovember 26, 1946
    Papua New GuineaDecember 4, 1975
    ParaguayAugust 22, 1994
    PeruFebruary 15, 1961
    PhilippinesSeptember 8, 1995
    PolandJune 1, 1995
    PortugalSeptember 12, 1988
    QatarJune 4, 1973
    RomaniaMarch 25, 1998
    RussiaJune 1, 1996
    RwandaDecember 10, 1998
    St. Kitts and NevisDecember 3, 1984
    St. LuciaMay 30, 1980
    St. Vincent and the GrenadinesAugust 24, 1981
    SamoaOctober 6, 1994
    San MarinoSeptember 23, 1992
    Saudi ArabiaMarch 22, 1961
    SenegalJune 1, 1996
    SeychellesJanuary 3, 1978
    Sierra LeoneDecember 14, 1995
    SingaporeNovember 9, 1968
    Slovak RepublicOctober 1, 1995
    SloveniaSeptember 1, 1995
    Solomon IslandsJuly 24, 1979
    South AfricaSeptember 15, 1973
    SpainJuly 15, 1986
    Sri LankaMarch 15, 1994
    SurinameJune 29, 1978
    SwazilandDecember 11,1989
    SwedenFebruary 15, 1961
    SwitzerlandMay 29, 1992
    TanzaniaJuly 15, 1996
    ThailandMay 4, 1990
    TogoJune 1,1996
    TongaMarch 22, 1991
    Trinidad and TobagoDecember 13, 1993
    TunisiaJanuary 6, 1993
    TurkeyMarch 22, 1990
    UgandaApril 5, 1994
    UkraineSeptember 24, 1996
    United Arab EmiratesFebruary 13, 1974
    United KingdomFebruary 15, 1961
    United StatesDecember 10, 1946
    UruguayMay 2, 1980
    VanuatuDecember 1, 1982
    Venezuela, República Bolivariana deJuly 1, 1976
    Yemen, Republic ofDecember 10, 1996
    ZimbabweFebruary 3, 1995
    Table 11.18.Exchange Rate Arrangements and Anchors of Monetary Policy as of December 31, 1999
    New Exchange Rate Classification System
    The new classification system is based on the members’ actual, de facto, regimes that may differ from their officially announced arrangements. The system ranks exchange rate regimes on the basis of the degree of flexibility of the arrangement. It distinguishes among the more rigid forms of pegged regimes (such as currency board arrangements); other conventional fixed peg regimes against a single currency or a basket of currencies; exchange rate bands around a fixed peg; crawling peg arrangements; and exchange rate bands around crawling pegs, in order to help assess the implications of the choice of exchange rate regime for the degree of independence of monetary policy. This includes a category to distinguish the exchange arrangements of those countries that have no separate legal tender. The new system presents members’ exchange rate regimes against alternative monetary policy frameworks with the intention of using both criteria as a way of providing greater transparency in the classification scheme and to illustrate that different forms of exchange rate regimes could be consistent with similar monetary frameworks. The following explains the categories.
    Exchange Rate Regime
    Exchange Arrangements with No Separate Legal Tender
    The currency of another country circulates as the sole legal tender or the member belongs to a monetary or currency union in which the same legal tender is shared by the members of the union. Adopting such regimes is a form of ultimate sacrifice for surrendering monetary control where no scope is left for national monetary authorities to conduct independent monetary policy.
    Currency Board Arrangements
    A monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation. This implies that domestic currency be issued only against foreign exchange and that it remain fully backed by foreign assets, eliminating traditional central bank functions such as monetary control and the lender of last resort and leaving little scope for discretionary monetary policy; some flexibility may still be afforded depending on how strict the rules of the boards are established.
    Other Conventional Fixed Peg Arrangements
    The country pegs (formally or de facto) its currency at a fixed rate to a major currency or a basket of currencies, where the exchange rate fluctuates within a narrow margin of at most ±1 percent around a central rate. A weighted composite is formed from the currencies of major trading or financial partners and currency weights reflect the geographical distribution of trade, services, or capital flows. The currency composites can also be standardized, such as those of the SDR and the ecu. The monetary authority stands ready to maintain the fixed parity through intervention, limiting the degree of monetary policy discretion; the degree of flexibility of monetary policy, however, is greater relative to currency board arrangements or currency unions, in that traditional central banking functions are, although limited, still possible, and the monetary authority can adjust the level of the exchange rate, though infrequently.
    Pegged Exchange Rates Within Horizontal Bands
    The value of the currency is maintained within margins of fluctuation around a formal or de facto fixed peg that are wider than ±1 percent around a central rate. It also includes the arrangements of the countries in the exchange rate mechanism (ERM) of the European Monetary System (EMS)—replaced with ERM-II on January 1, 1999. There is some limited degree of monetary policy discretion, with the degree of discretion depending on the band width.
    Crawling Pegs
    The currency is adjusted periodically in small amounts at a fixed, pre-announced rate or in response to changes in selective quantitative indicators (past inflation differentials vis-à-vis major trading partners, differentials between the target inflation and expected inflation in major trading partners, etc.). The rate of crawl can be set to generate inflation adjusted changes in the currency’s value (“backward looking”), or at a pre-announced fixed rate below the projected inflation differentials (”forward looking”). Maintaining a credible crawling peg imposes constraints on monetary policy in a similar manner as a fixed peg system.
    Exchange Rates Within Crawling Bands
    The currency is maintained within certain fluctuation margins around a central rate that is adjusted periodically at a fixed preannounced rate or in response to changes in selective quantitative indicators. The degree of flexibility of the exchange rate is a function of the width of the band, with bands chosen to be either symmetric around a crawling central parity or to widen gradually with an asymmetric choice of the crawl of upper and lower bands (in the latter case, there is no preannouncement of a central rate). The commitment to maintain the exchange rate within the band continues to impose constraints on monetary policy, with the degree of policy independence being a function of the band width.
    Managed Floating with No Preannounced Path for the Exchange Rate
    The monetary authority influences the movements of the exchange rate through active intervention in the foreign exchange market without specifying, or precommitting to, a preannounced path for the exchange rate. Indicators for managing the rate are broadly judgmental, including, for example, the balance of payments position, international reserves, and parallel market developments, and the adjustments may not be automatic.
    Independent Floating
    The exchange rate is market determined, with any foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it. In these regimes, monetary policy is in principle independent of exchange rate policy.
    Monetary Policy Framework
    Members’ exchange rate regimes are presented against alternative monetary policy frameworks in order to present the role of the exchange rate in broad economic policy and help identify potential sources of inconsistency in the monetary-exchange rate policy mix.
    Exchange Rate Anchor
    The monetary authority stands ready to buy and sell foreign exchange at given quoted rates to maintain the exchange rate at its preannounced level or range (the exchange rate serves as the nominal anchor or intermediate target of monetary policy). These regimes cover exchange rate regimes with no separate legal tender, currency board arrangements, fixed pegs with and without bands, and crawling pegs with and without bands, where the rate of crawl is set in a forward looking manner.
    Monetary Aggregate Anchor
    The monetary authority uses its instruments to achieve a target growth rate for a monetary aggregate (reserve money, M1, M2, etc.) and the targeted aggregate becomes the nominal anchor or intermediate target of monetary policy.
    Inflation-Targeting Framework
    A framework that targets inflation involves the public announcement of medium-term numerical targets for inflation with an institutional commitment by the monetary authority to achieve these targets. Additional key features include increased communication with the public and the markets about the plans and objectives of monetary policymakers and increased accountability of the central bank for obtaining its inflation objectives. Monetary policy decisions are guided by the deviation of forecasts of future inflation from the announced inflation target, with the inflation forecast acting (implicitly or explicitly) as the intermediate target of monetary policy.
    IMF-Supported or Other Monetary Program
    An IMF-supported or other monetary program involves implementation of monetary and exchange rate policy within the confines of a framework that establishes floors for international reserves and ceilings for net domestic assets of the central bank. As the ceiling on net domestic assets limits increases in reserve money through central bank operations, indicative targets for reserve money may be appended to this system.
    The country has no explicitly stated nominal anchor but rather monitors various indicators in conducting monetary policy, or there is no relevant information available for the country.
    Monetary Policy Framework1

    Rate Regime

    (Number of

    Exchange rate anchorMonetary






    or other


    Exchange arrangements with no separate legal tender (37)Another currency as legal tenderBenin*Euro Area3,4
    CFA franc zoneBurkina Faso*Austria
    KiribatiAntigua and BarbudaBenin*Cameroon*Central African Republic*Finland
    Marshall IslandsBurkina Faso*Central African Rep.*France
    DominicaCôted’Ivoire*Côte d’Ivoire*Germany
    PalauSt. Kitts and NevisMali*Congo, Rep. ofItaly
    PanamaNigerEquatorial GuineaMali*Luxembourg
    San MarinoSt. LuciaSenegal*Senegal*Netherlands
    St. Vincent and the GrenadinesTogoGabonPortugal
    Currency board arrangements (8)Argentina*
    Bosnia and Herzegovina*Argentina*
    Brunei DarussalamBosnia and Herzegovina*
    Hong Kong SARBulgaria*
    Other conventional fixed peg arrangements (including de facto peg arrangements under managed floating) (45)Against a single currency (32)Against a composite (13)China*6Bangladesh*
    ArubaBangladesh*Cape Verde*
    Bahamas, The5Botswana5El Salvador*6
    BelizeLatvia*Macedonia, FYR*6
    Cape Verde*MoroccoPakistan*6
    El Salvador*6Solomon Islands
    Iran, Islamic Rep. of5,6Tonga
    Macedonia, FYR*6
    Netherlands Antilles
    Saudi Arabia6,7
    Syrian Arab Republic5
    Trinidad and Tobago
    United Arab Emirates6,7
    Pegged exchange rates within horizontal bands (6)9Within a cooperative arrangement ERM-II (2)Other band arrangements (4)
    Crawling pegs (5)6Costa RicaBolivia
    Exchange rates within crawling bands (7)6,10Israel*Honduras*HungarySri Lanka*Israel*Honduras*
    Uruguay*Poland*Sri Lanka*Poland*Uruguay*
    Managed floating with no pre-announced path for exchange rate (27)Lao P.D.R.5Czech Rep.AzerbaijanAlgeria3
    SloveniaKenyaDominican Rep.3,5
    Kyrgyz RepublicEthiopia3
    Slovak Rep.3
    Independently floating (50)Colombia*AustraliaAlbaniaAfghanistan, Islamic State of5,11
    Gambia, The*Brazil12Armenia
    Guinea*Chile5Gambia, The*Angola3
    Guyana*New ZealandGeorgiaCongo, Dem. Rep. of the3
    Mauritius6United KingdomGuinea*Ecuador3
    São Toméand PríncipeKazakhstanLiberia3
    Korea*Papua New Guinea3
    Sierra Leone*Madagascar
    Yemen, Rep. of*MexicoSomalia5,11
    MoldovaSouth Africa3
    MozambiqueUnited States3
    Sierra Leone
    Yemen, Rep. of*
    Sources: IMF staff reports.

    A country with an asterisk, *, indicates that the country adopts more than one nominal anchor in conducting monetary policy. It should be noted, however, that it would not be possible, for practical reasons, to infer from this table which nominal anchor plays the principal role in conducting monetary policy.

    These countries also have a currency board arrangement.

    The country has no explicitly stated nominal anchor but rather monitors various indicators in conducting monetary policy.

    Until they are withdrawn in the first half of 2002, national currencies will retain their status as legal tender within their home territories.

    Member maintained exchange arrangements involving more than one market. The arrangement shown is that maintained in the major market.

    The indicated country has a de facto arrangement under a formally announced policy of managed or independent floating. In the case of Jordan, it indicates that the country has a de jure peg to the SDR but a de facto peg to the U.S. dollar. In the case of Mauritius, the authorities have a de facto policy of independent floating, with only infrequent intervention by the central bank.

    Exchange rates are determined on the basis of a fixed relationship to the SDR, within margins of up to ±7.25 percent. However, because of the maintenance of a relatively stable relationship with the U.S. dollar, these margins are not always observed.

    Comoros has the same arrangement with the French treasury as do the CFA franc zone countries.

    The band width for these countries is Cyprus (±2.25 percent), Denmark (±2.25 percent), Greece (±15 percent), Iceland (±6 percent), Libya (±77.5 percent), and Vietnam (0.1 percent daily movement, one-sided).

    The band for these countries is Honduras (±7 percent), Hungary (±2.25 percent), Israel (symmetric band of 43 percent), Poland (±15 percent), Sri Lanka (±1 percent), Uruguay (±3 percent), and Venezuela (±7.5 percent).

    No relevant information is available for the country.

    Brazil maintains an IMF-supported program.

    Appendix III: Principal Policy Decisions of the Executive Board

    A. Access Policy and Limits in Credit Tranches and Under Extended Fund Facility—Review

    1. Pursuant to Decision No. 11876-(99/2)1, January 6, 1999, the Fund has reviewed the guidelines and the limits for access by members to the Fund’s general resources under the credit tranches and the Extended Fund Facility and decides that they remain appropriate in the present circumstances.

    2. The next of the annual reviews prescribed by Decision No. 11876-(99/2)1, January 6, 1999, shall be completed by December 31, 2000.

    Decision No. 12103-(99/135)

    December 20, 1999

    B. IMF’s Income Position

    (a) Disposition of Net Income for FY2000

    SDR 100,873,481 of the Fund’s net income for FY 2000 derived from the application of paragraph 2 of Decision No. 11944-(99/49)2, adopted April 30, 1999 shall be placed to the Fund’s Special Reserve after the end of the financial year.

    The SDR 268,262,272 gain derived from the implementation of International Accounting Standard 19—Employee Benefits during FY 2000 shall be placed to the Fund’s Special Reserve and shall be recorded separately in the financial records of the Fund.

    Decision No. 12231-(00/68)

    July 6, 2000

    (b) The Rate of Charge on the Use of Fund Resources for FT 2001

    1. Notwithstanding Rule I-6(4)(a), effective May 2, 2000, the proportion of the rate of charge referred to in Rule 1-6(4) to the SDR interest rate under Rule T-1 shall be 115.9 percent.

    2. The net income target for financial year 2001 shall be SDR 48 million. Any net income for financial year 2001 in excess of SDR 48 million shall be used to reduce retroactively the proportion of the rate of charge for financial year 2001. If net income for financial year 2001 is below SDR 48 million, the amount of projected net income for financial year 2002 shall be increased by the equivalent of that shortfall. For the purpose of this provision, net income shall be calculated without taking into account net operational income generated by the Supplemental Reserve Facility and Contingent Credit Lines or the net cumulative effect on income of the implementation of International Accounting Standard 19—Employee Benefits.

    Decision No. 12188-(00/45)

    April 28, 2000

    (c) Supplemental Reserve Facility and Contingent Credit Lines—Disposition of Net Operating Income

    For financial year 2001, after meeting the cost of administering the PRGF Trust, any remaining net operational income generated by the Supplemental Reserve Facility and the Contingent Credit Lines shall be transferred, after the end of that financial year, to the General Reserve.

    Decision No. 12191-(00/45)SRF/CCL

    April 28, 2000

    C. SDR Department—Rules for Designation—Revision

    Pursuant to Article XIX, Section 5(c), the rules for designation in the SDR Department are revised as follows:

    (a) Participants subject to designation under Article XIX, Section 5(a)(i) shall be designated for such amounts as will promote over time equality in the ratios of the participants’ holdings of special drawing rights in excess of their net cumulative allocations to their existing Fund quotas.

    (b) The formula to give effect to (a) above shall be such that participants subject to designation shall be designated:

    (i) in proportion to their existing Fund quotas when the ratios described in (a) above are equal; and

    (ii) in such manner as gradually to reduce the difference between the ratios described in (a) above that are low and the ratios that are high.

    Decision No. 11976-(99/59) S

    June 3, 1999

    D. Second Special Contingent Account (SCA-2)

    (a) Early Termination of SCA-2

    Considering that there is no longer a need for retaining precautionary balances in the Special Contingent Account 2 (SCA-2) and with an expectation that these resources will thus become available, or an equivalent amount will be made available, to supplement those in the PRGF-HIPC Trust, the Fund decides to terminate the SCA-2 established by Decision No. 9471-(90/98)3, adopted June 20, 1990.

    Decision No. 12060-(99/130)

    December 8, 1999

    (b) Establishment of the Post-SCA-2 Administered Account

    1. Pursuant to Article V, Section 2(b), the Fund adopts the Instrument to Establish the Post-SCA-2 Administered Account that is annexed to this Decision [see Attachment].

    2. The provisions of the Instrument may be amended by a decision of the Fund with the concurrence of the members that have transferred resources remaining in the account at the time of such decision.

    Decision No. 12061-(99/130)

    December 8, 1999


    To fulfill its purposes, the International Monetary Fund (the Fund) has adopted this Instrument to establish an account in accordance with Article V, Section 2(b), which shall be governed and administered by the Fund in accordance with the terms and conditions of this Instrument.

    1. The Fund hereby establishes an account (the Account) for the temporary administration of resources transferred to the Account by a member following the termination of the SCA-2, while deciding on the final disposition of those resources.

    2. The SDR shall be the unit of account. Transfers may be made in or exchanged for SDRs in accordance with such arrangements as may be made by the Managing Director for the holding and use of SDRs by the Account.

    3. The resources of the Account shall be invested, and the proceeds of investments reinvested, at the discretion of the Managing Director. The Managing Director is authorized (i) to make all arrangements, including establishment of accounts in the name of the International Monetary Fund, with such depositories of the Fund as may be necessary to carry out the operations of the account, and (ii) to take all measures necessary to implement the provisions of this Instrument.

    4. The Fund shall transfer all or part of the resources received from a member, together with the member’s pro rata share of the investment returns, to the PRGF-HIPC Trust, or otherwise in accordance with the member’s instructions.

    5. The assets held in the Account shall be kept separate from the assets and property of all other accounts of, or administered by, the Fund. The assets in the Account shall not be used to discharge or meet any liabilities, obligations, or losses incurred by the Fund in the administration of such other accounts.

    6. Subject to the provisions of this Instrument, the Fund, in administering the Account, shall apply mutatis mutandis the same rules and procedures as apply to operations of the General Resources Account of the Fund.

    7. No charge shall be levied on the members for the services rendered by the Fund in the administration, operation, and termination of this Account.

    8. The Fund shall maintain separate financial records and prepare separate financial statements for the Account.

    9. The external audit firm selected under Section 20 of the Fund’s By-laws shall audit the operations and transactions of the Account. The audit shall relate to the financial year of the Fund.

    10. The Fund shall report on the assets and property and on the operations and transactions of the Account in the Annual Report of the Executive Board to the Board of Governors and shall include in that Annual Report the report of the external audit firm and the External Audit Committee.

    11. The Account shall be terminated upon completion of the transfers contemplated in paragraph 4.

    12. Any questions between a member and the Fund arising hereunder shall be settled by mutual agreement.

    (c) Use of SDRs in Financial Operations Under the PRGF-HIPC Trust or Under an Administered Account

    In accordance with Article XVII, Section 3, the Fund prescribes that (i) a participant or a prescribed holder, by agreement with a participant or a prescribed holder and at the instruction of the Fund, may transfer SDRs to that participant or prescribed holder in effecting a transfer to or from the Post-SCA-2 Administered Account or in effecting a payment due to or by the Fund in connection with financial operations under the PRGF-HIPC Trust or under an administered account established for the benefit of the PRGF-HIPC Trust; (ii) operations pursuant to these prescriptions shall be recorded in accordance with Rule P-9.

    Decision No. 12062-(99/130)

    December 8, 1999

    E. Enhanced Structural Adjustment Facility (ESAF)

    (a) ESAF and ESAF-HIPC Trust—Reserve Account—Review

    Pursuant to Decision No. 10286-(93/23) ESAF4, the Fund has reviewed the adequacy of the Reserve Account of the ESAF Trust and determines that amounts held in the account are sufficient to meet all obligations which could give rise to a payment from the Reserve Account to lenders to the Loan Account of the ESAF Trust in the six months from July 1 to December 31, 1999.

    Decision No. 12008-(99/73) ESAF

    June 30, 1999

    (b) ESAF—Borrowing for Loan Account—Consultation with Creditors

    The Managing Director, after having consulted with all creditors in accordance with Decision No. 10534-(93/170) ESAF5, adopted December 15, 1993, is authorized to confirm that he does not intend to propose to the Executive Board borrowing of more than SDR 11.5 billion for the Loan Account of the Enhanced Structural Adjustment Facility Trust except after consultation with all creditors regarding the justification for such additional borrowing and the adequacy of the Trust’s Reserve in relation thereto.

    Decision No. 12032-(99/87) ESAF

    August 2, 1999

    (c) Transforming Enhanced Structural Adjustment Facility into the Poverty Reduction and Growth Facility

    (See Section F below, subsection (a) for the full text of this Decision.)

    F. Poverty Reduction and Growth Facility (PRGF)

    (a) Transforming Enhanced Structural Adjustment Facility into the Poverty Reduction and Growth Facility

    1. The name of the Enhanced Structural Adjustment Facility established by Decision No. 8757-(87/176) SAF/ESAF6, adopted December 18, 1987, shall be changed to the Poverty Reduction and Growth Facility.

    2. The following changes shall be made to the Enhanced Structural Adjustment Facility Trust established by Decision No. 8759-(87/176) ESAF7, adopted December 18, 1987:

    (a) the name of the Trust shall be changed to the Poverty Reduction and Growth Facility Trust; accordingly, Paragraph 1 of Decision No. 8759 and the Tide and Introductory Section of the Annex to that Decision, containing the Trust Instrument, shall be amended by substituting Poverty Reduction and Growth Facility;

    (b) Section I, Paragraph 1 of the Trust Instrument shall be amended to read as follows:

    The Trust shall assist in fulfilling the purposes of the Fund by providing loans on concessional terms (hereinafter called Trust loans) to low-income developing members that qualify for assistance under this Instrument, in order to support programs to strengthen substantially and in a sustainable manner their balance of payments position and to foster durable growth, leading to higher living standards and a reduction in poverty.

    3. The name of the Trust for Special ESAF Operations for the Heavily Indebted Poor Countries and Interim ESAF Subsidy Operations: shall be changed to the Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations. Accordingly,

    (a) Paragraphs 1 and 2 of Decision No. 11436-(97/10)8, adopted February 4, 1997, and the title and Introductory Section of the Annex to that Decision containing the Trust Instrument, shall be amended by substituting Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations for Trust for Special ESAF Operations for the Heavily Indebted Poor Countries and Interim ESAF Subsidy Operations.

    (b) All references to ESAF in Section I, paragraphs l(viii) and l(ix), Section I, paragraph 2(b), Section III, paragraphs 1(a) and 1(b), and Section III, paragraph 2(c) of the Trust Instrument shall be changed to references to PRGF.

    4. References in other Fund decisions, instruments, agreements, or documents related to the Enhanced Structural Adjustment Facility, the Enhanced Structural Adjustment Facility Trust, or any of its Accounts, the ESAF, the ESAF Trust, the Trust for Special ESAF Operations for the Heavily Indebted Poor Countries and Interim ESAF Subsidy Operations, or the ESAF-HIPC Trust shall be understood to be to the Poverty Reduction and Growth Facility, the Poverty Reduction and Growth Facility Trust, or any of its Accounts, the PRGF, the PRGF Trust, the Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations, or the PRGF-HIPC Trust, respectively.

    5. This Decision shall become effective when all contributors to the ESAF Trust have consented to the changes.

    Decision No. 12087-(99/118) PRGF

    October 21, 1999, effective November 22, 1999

    (b) PRGF Trust Reserve Account—Transfer to the PRGF-HIPC Trust

    1. For financial years 2001-2004, no reimbursement shall be made to the General Resources Account from the PRGF Trust Reserve Account (through the Special Disbursement Account) for the cost of administering the PRGF Trust.

    2. One fourth of the estimated cost shall be transferred to the PRGF-HIPC Trust at the end of each financial quarter ended July 31 and October 31, 2000, January 31 and April 30, 2001, July 31 and October 31, 2001, January 31 and April 30, 2002, July 31 and October 31, 2002, January 31 and April 30, 2003, July 31 and October 31, 2003, and January 31 and April 30, 2004.

    Decision No. 12065-(99/130) PRGF

    December 8, 1999, effective January 10, 2000

    G. Contingent Credit Lines—Grandfathering of Extended Arrangements—Amendment of Decision No. 11627 (97/123) SRF9 and Chairman’s Summing Up at Executive Board Meeting 99/48

    1. In Decision No. 11627 (97/123) SRF8, adopted December 17, 1997, on the Supplemental Reserve Facility and Contingent Credit Lines, Paragraph 18 shall be replaced by the following:

    18. Notwithstanding the provisions of paragraph 16, financing under this section may be committed and provided under any Extended Arrangement in effect on June 30, 1999.

    2. In the summing up by the Chairman on Contingent Credit Lines at the Executive Board Meeting 99/48 of April 23, 1999, footnote 1 shall be replaced by the following:

    1 However, CCL resources could also be committed under an Extended Arrangement in effect on June 30, 1999.

    Decision No. 11982-(99/61) SRF/CCL

    June 8, 1999

    H. Y2K Facility—Establishment

    1. From October 15, 1999 through March 31, 2000, the Fund will be prepared to extend financing, in accordance with the provisions of this Decision, to a member that encounters balance of payments difficulties arising from loss of confidence or other problems related to potential or actual failures of computer systems, within or outside the member’s territory, to recognize the year “00” as the year 2000 (hereinafter referred to as Y2K-related problems).

    I. Eligibility and qualification

    2. Requests for financing under this Decision will be met where the Fund is satisfied that:

    (a) the member has a balance of payments need arising from Y2K-related problems and is taking steps necessary to deal with such problems that are within its control;

    (b) it has adequate assurance of the member’s capacity to make repurchases in accordance with this Decision, taking into account the relevant actions taken by the member, its plan of further measures to be implemented, and, if applicable, the measures taken and to be taken in other countries, to resolve the member’s Y2K-related problems;

    (c) the member is pursuing sound general economic and financial policies, including policies to address other sources of balance of payments difficulties, if any;

    (d) the member is making appropriate use of its reserves and other available sources of external financing to meet its balance of payments difficulties; and

    (e) the member is cooperating with the Fund in accordance with paragraph 5.

    II. Access

    3. Financing under this Decision shall not exceed 50 percent of the member’s quota, unless there are exceptional circumstances, and shall be in the form of one or more outright purchases. Each request for a purchase shall satisfy the requirements set forth in this Decision.

    4. In providing financing under this Decision, the Fund, as under any other policies, shall pay due attention to the member’s capacity to service its financial obligations to the Fund, and, having regard to the outstanding financial obligations of the member to the Fund, may determine the amount of financing to be provided accordingly.

    III. Cooperation

    5. A member shall be deemed to be cooperating with the Fund if:

    (a) the last Article IV consultation with the member was completed broadly in accordance with its consultation cycle and thereafter the member’s authorities have provided to the Fund timely information on economic developments and maintained a constructive dialogue with Fund staff on their economic and financial policies;

    (b) the member has a Fund arrangement, under which performance is satisfactory; or

    (c) the Fund approves an arrangement at the time of the request.

    IV. Charges

    6. During the first six months from the date of each purchase under this Decision, the rate of charge under Article V, Section 8(b) on holdings acquired as a result of purchases under this Decision shall be 300 basis points per annum above the rate of charge referred to in Rule 1-6(4) as adjusted for purposes of burden sharing. Such surcharge shall be increased by 50 basis points at the end of that period subject to the provisions of paragraph 7. Pending a decision on the use to be given to the income generated under this Decision, such income shall not be taken into account when determining the amount of net income in excess of the net income target for purposes of paragraph 2 of Decision No. 11944-(99/49)10, April 30, 1999.

    7. The provisions of Decision No. 8165-(85/189) G/TR11, December 30, 1985, except Section IV, shall apply to overdue financial obligations arising under this Decision, subject to the following provision:

    The rate of charge on overdue repurchases shall be determined by the Fund but shall not be less than the maximum rate of charge determined under paragraph 6.

    V. Repurchases

    8. A member making purchases under this Decision shall repurchase the outstanding amounts of its currency resulting from such purchases within one year from the date of each purchase.

    9. The member will be expected to repurchase the outstanding amounts of its currency resulting from purchases under this Decision after six months of each purchase, provided that the Fund may, upon the request of the member, decide to extend each such repurchase expectation until the repurchase becomes due under paragraph 8.

    10. The Fund shall not approve, and the Managing Director shall not recommend for approval, a request for the use of the general resources of the Fund by a member that is failing to meet a repurchase expectation under paragraph 9. Provision shall be made in each stand-by and extended arrangement for the suspension of further purchases under the arrangement whenever a member fails to meet a repurchase expectation under paragraph 9.

    VI. Other provisions

    11. Purchases under this Decision and holdings resulting from such purchases shall be excluded for purposes of the definition of reserve tranche purchase pursuant to Article XXX(c).

    12. Except for the purpose of determining the level of conditionality applied to purchases in the credit tranches, the Fund’s holdings of a member’s currency resulting from purchases under this Decision shall be considered separate from the Fund’s holdings of the same currency resulting from purchases under any other policy on the use of the Fund’s general resources. In cases of concurrent requests for purchases under this Decision and for purchases in the credit tranches, purchases under this Decision shall be deemed to be made first.

    13. In order to carry out the purposes of this Decision, the Fund will be prepared to grant a waiver of the limitation of 200 percent of quota in Article V, Section 3(b)(iii), whenever necessary to permit purchases under this Decision or to permit other purchases that would raise the Fund’s holdings of the purchasing member’s currency above that limitation because of purchases outstanding under this Decision.

    14. When requesting a purchase under this Decision, the member will represent that, as long as it has outstanding purchases under this Decision, it will consult with the Fund from time to time, at its own initiative or at the request of the Managing Director.

    Decision No. 12058-(99/110) Y2KF

    September 24, 1999

    I. Eleventh General Review of Quotas—Period for Consent to Increases—Further Extension

    Pursuant to Paragraph 4 of the Resolution of the Board of Governors No. 53-2, “Increase in Quotas of Fund Members—Eleventh General Review,” the Executive Board decides that notices of consent from members to increases in their quotas must be received in the Fund by 6:00 p.m., Washington time, on July 31, 2000.

    Decision No. 12125-(00/7)

    January 19, 2000

    J. Gold.

    (a) Off-Market Transactions in Gold by Fund—Proposed Board of Governors Resolution

    The Executive Board approves the attached draft Resolution for submission to the Board of Governors for adoption at the 1999 Annual Meetings.

    Decision No. 12069-(99/110)

    September 24, 1999


    Resolution of the Board of Governors on Off-Market Transactions in Gold by the Fund

    WHEREAS the Executive Board is considering off-market transactions in gold consisting of sales of up to 14 million ounces of fine gold on the basis of prices in the market to cooperating members with repurchase obligations to the Fund falling due, and acceptance of the same amount of gold from those members in payments of their repurchase obligations falling due to the Fund; and

    WHEREAS these off-market transactions will enable the Fund to place an amount of the sales proceeds equivalent to SDR 35 per ounce of fine gold in the General Resources Account and the balance in the Special Disbursement Account for investments for the benefit of the ESAF-HIPC Trust; and

    WHEREAS the Interim Committee has requested the endorsement by the Board of Governors of this approach as a one-time operation of a highly exceptional nature,

    NOW, THEREFORE, the Board of Governors hereby RESOLVES that:

    The off-market transactions of up to 14 million ounces of fine gold by the Fund that are envisaged will be a one-time operation of a highly exceptional nature that is part of a broader financing package to allow the Fund to contribute to the resolution of the debt problems of the Heavily Indebted Poor Countries at the turn of the millennium and to the continuation of concessional operations to support countries’ efforts to achieve sustained growth and poverty reduction.

    (b) Off-Market Gold Sales, Acceptance of Gold in Payment of Repurchase Obligations and Use of Proceeds of Gold Sales Placed in Special Disbursement Account

    1. The Fund stands ready to sell gold held by it on August 31, 1975 to generate an amount equivalent to SDR 2.226 billion for the Special Disbursement Account (gold profits), but not to exceed 14 million troy ounces of fine gold, to members willing to buy such gold and that meet the following conditions: (i) have repurchase obligations falling due to the Fund, (ii) represent that they will not sell the gold so acquired in the market, and (iii) represent that they intend to use the gold so purchased to make payments in gold to the Fund in connection with a repurchase obligation falling due on the day of the gold purchase. Each sale shall be made for U.S. dollars at the U.S. dollar price per troy ounce of fine gold at the morning fixing price in London three business days prior to the value day of the sale, and the value of the U.S. dollar in terms of the SDR shall be as determined under Rule 0-2(a). Payment shall be made on the same value day of the related repurchase obligation. In accordance with Article V, Section 12(c), the Fund has consulted with the United States for whose currency the gold will be sold.

    2. In accordance with Article V, Section 12(f), an amount of the proceeds of gold sales equivalent at the time of sale to one SDR per 0.888671 gram of fine gold shall be placed in the General Resources Account. Any balance over this amount, but not to exceed the equivalent of SDR 2.226 billion, shall be held in the Special Disbursement Account and invested in accordance with Article V, Section 12(h). Of the proceeds of such investments, only nine-fourteenths (9/14) of the equivalent of SDR 1.76 billion on an as needed basis shall be transferred, as needed, to a separate subaccount of the PRGF-HIPC Trust and shall be used exclusively to provide debt relief from the Fund under the HIPC Initiative to members that qualify for such relief or, if not needed for such purpose, shall be used to replenish resources from other sources that have been used for such relief. The remaining five-fourteenths (5/14) of proceeds from investments equivalent to SDR 1.76 billion on an as needed basis shall be kept, and reinvested, in the Special Disbursement Account until a further decision on their use is adopted.

    3. The Fund stands ready to accept gold in payment of repurchase obligations from a member that has acquired gold from the Fund in accordance with paragraph 1 of this decision, up to the amount that has been sold to the member under paragraph 1 of this decision. Gold received in payment by the Fund under this decision shall be valued in terms of the SDR on the basis of the U.S. dollar price per troy ounce of fine gold at the morning fixing price in London three business days prior to the value day of the payment, and the value of the U.S. dollar in terms of the SDR shall be as determined under Rule 0-2(a).

    Decision No. 12063-(99/130)

    December 8, 1999

    (c) Off-Market Gold Transactions for FY 2000: Mitigation of Cost to Fund

    For the purpose of paragraph 2 of Decision No. 11944-(99/49)12, adopted April 30, 1999, net income shall be calculated without taking into account the effect on income of accepting gold in payment of repurchase obligations falling due to the Fund authorized by Decision No. 12063-(99/130).

    Decision No. 12064-(99/130)

    December 8, 1999

    (d) Special Disbursement Account—Investments

    The first sentence of Decision No. 7990-(85/81), adopted May 28, 1985 shall be amended to read as follows:

    The Managing Director shall place in investments, denominated in SDRs, with the Bank for International Settlements (BIS), the currencies received by the Special Disbursement Account from gold sales and, pending their use, the currencies received by the Special Disbursement Account as a result of the termination of the Trust Fund, unless the Managing Director considers that the terms offered by the BIS on an intended deposit denominated in SDRs are not sufficiently attractive.

    Decision No. 12066-(99/130)

    December 8, 1999

    K. Transparency and Fund Policies

    (a) Financial Transactions Plan—Amendment of Rule O-10 (to Reflect Renaming of Operational Budget as Financial Transactions Plan)

    Rule O-10 is amended to read as follows:

    (a) At quarterly intervals the Executive Board shall decide on the transactions plan, including amounts, for the use of currencies and SDRs in the operations and transactions of the Fund conducted through the General Resources Account until the next decision takes effect.

    (b) The Executive Board may decide at any time to adopt a special transactions plan.

    (c) On the request of any member, an Executive Director, or the Managing Director, the Executive Board shall review, and if necessary amend, any transactions plan adopted pursuant to (a) or (b) above.

    Decision No. 12145-(00/18)

    February 25, 2000

    (b) Financial Transactions Plan—Publication

    Beginning with the financial transactions plan for the period March-May 2000, the Fund shall publish the outcome of the financial transactions plan three months after the period covered by the transactions plan.

    Decision No. 12146-(00/18)

    February 25, 2000

    (c) Use of Fund Resources—Release of Chairman’s Statement

    After the Executive Board adopts a decision regarding a member’s request for the use of Fund resources, or a review under a Fund arrangement, a Chairman’s statement on the discussion, emphasizing the key points made by Executive Directors, will be released to the public. Before the statement is released, it will be read by the Chairman to the Executive Board, and Executive Directors will have an opportunity to comment at that time.

    Decision No. 11971-(99/58)

    June 3, 1999

    (d) Public Information Notices for Policy Matters

    After an Executive Board meeting relating to policy issues, the Executive Board may decide to release a Public Information Notice on the discussion. This Public Information Notice would be based on a summing up of the discussion by the Chairman, or on the decision that may have been adopted by the Executive Board, or both, as the case may be. It would also include a short section setting out some background information on the relevant issue.

    The Executive Board will review this decision, in the light of experience, after a year.

    Decision No. 11972-(99/58)

    June 3, 1999

    (e) Pilot Project for the Publication of Article TV Consultation Staff Reports

    The Fund establishes a pilot project under which a staff report on Article IV consultation discussions with a member, including one that also relates to the use of Fund resources, may be published. A member wishing to participate in the project will notify the Managing Director. Prior to the publication of a report, the member concerned may propose to the Managing Director the deletion of highly market-sensitive information. The Fund will publish (including on its web site) the report, along with the Public Information Notice and any statement by the member on the Article IV consultation, as soon as the Public Information Notice is finalized. A participating member will be free to withdraw from the project at any time. After a year, a review of experience under the project will be commenced. The project will terminate on October 4, 2000, unless otherwise decided by the Fund.

    Decision No. 11973-(99/58)

    June 3, 1999

    (f) Publication of Letters of Intent, Memoranda of Economic and Financial Policies, and Policy Framework Papers

    When a member submits a request relating to a Fund arrangement, it will be presumed that the relevant letters of intent, memoranda of economic and financial policies, and the policy framework paper (if any) will be published (including by the Fund on its web site) no later than shortly after the Fund approves the request. If, in a particular case, a member does not intend to publish these documents, this and the basis for the decision would be explained, through its Executive Director, to the Fund before the Fund approves its request relating to a Fund arrangement.

    Decision No. 11974-(99/58)

    June 3, 1999

    L. Side Letters and the Use of Fund Resources


    1. The existence and content of side letters will be treated with the utmost confidentiality by management, Fund staff, and Executive Directors.

    Definition of Side Letters

    2. A side letter is a letter or other written communication from a member’s authorities to Fund management or staff containing confidential policy understandings complementary to or elaborating upon those in new or currently applicable letters of intent supporting a request for the use of Fund resources.

    3. Understandings contained in side letters will not contradict or detract from those contained in the applicable letters of intent.

    Use of Side Letters

    4. Members requesting the use of Fund resources are encouraged to include all policy undertakings in letters of intent. Side letters will be used sparingly and only in those circumstances which the authorities consider, and management agrees, require such exceptional communication.

    5. The use of side letters to keep certain understandings confidential can be justified only if their publication would directly undermine the authorities’ ability to implement the program or render implementation more costly. Accordingly, their use will normally be limited to cases in which the premature release of the information would cause adverse market reaction or undermine the authorities’ efforts to prepare the domestic groundwork for a measure.

    6. While there is no presumption that particular kinds of measures would be conveyed in a side letter rather than a letter of intent, some matters that could in some cases be considered for inclusion in side letters would be: (i) exchange market intervention rules; (ii) bank closures; (iii) contingent fiscal measures; and (iv) measures affecting key prices.

    Communication of Side Letters to the Executive Board

    7. Fund staff will advise members’ authorities of this decision pertaining to the communication of side letters to the Executive Board before the authorities send side letters.

    8. The Executive Board will consider any side letter in a restricted session soon after the relevant letter of intent is issued to the Board. At this session, each Executive Director’s constituency will be represented by only one person. A numbered copy of the side letter will be made available to each such representative and, at the end of the meeting, each copy will be returned. Staff will be present to answer any questions, including questions about the circumstances that justified the use of the side letter.

    9. In principle, the full text of a side letter will be communicated to the Executive Board. However, at the request of the authorities, the Managing Director may delete from the copies to be communicated to the Board information of such specificity that:

    (i) it is substantially immaterial to Executive Directors’ consideration of the request for the use of Fund resources; and

    (ii) disclosure would: (a) seriously hamper the authorities’ capacity to conduct economic policy; or (b) confer an unfair market advantage upon persons not authorized to have knowledge of the information.

    10. Information that might in specific cases be deleted under paragraph 9 above includes: figures regarding foreign exchange markets (e.g., exchange rate intervention triggers or amounts of intervention), names of specific banks or companies, or specific dates for the introduction of certain policy measures.

    Communications about Side Letters by Executive Directors to Members’ Authorities

    11. Executive Directors who decide to communicate information about a side letter to their respective authorities should: (i) limit the recipients to those who have a strict need to know; (ii) inform the recipients of the need to treat the information as highly confidential; and (iii) inform the recipients about the procedures that apply to the communication of side letters to the Executive Board under this decision.

    12. Executive Directors that communicate information about a side letter to their respective authorities will inform promptly the Managing Director and the Executive Director for the member that sent the side letter of such communication.


    13. This decision will be reviewed by the Executive Board within one year, provided, however, that it will be reviewed promptly before that time if the confidentiality of any side letter has not been observed.

    Decision No. 12067-(99/108)

    September 22, 1999

    Appendix IV: IMF Relations with Other International Organizations

    The late 1990s were turbulent times for the world economy. Financial crises and financial market instability resulted in large part from increased global integration and the increased magnitude of international capital flows. To address these and other problems in the new millennium, the IMF is working ever more closely with other international and regional institutions. Together with the World Bank, the World Trade Organization (WTO), the United Nations (UN) and its specialized agencies, the Organization for Economic Cooperation and Development (OECD), the European Union (EU), the Bank for International Settlements (BIS), regional development banks, and intergovernmental groups, the IMF is seeking to address the economic and financial—and social—challenges of a globalized economy.

    Liaison with Other Organizations

    To build and maintain collaborative relationships with other international and regional institutions, the IMF has established a number of offices. These include the Office at the United Nations in New York, the Office in Europe, the Office in Geneva, and the Regional Office for Asia and the Pacific in Tokyo. The Director and Special Representative to the United Nations Office at UN headquarters in New York monitors and analyzes the developments and activities of the UN and its subsidiary bodies. The Office in Europe, located in Paris, maintains close working relations with the principal international organizations based in Europe—notably the OECD, the BIS, and EU institutions—as well as European monetary authorities. The Paris Office staff also supports the work of the Group of Ten industrial countries. The Office in Geneva monitors, analyzes, and reports on activities of such institutions as the WTO, the International Labor Organization (ILO), the UN Conference on Trade and Development (UNCTAD), and other Geneva-based socioeconomic agencies—with particular emphasis on the multilateral trading and financial system; it also tracks trade-related developments in the European Union. In addition, the Geneva Office works closely with the Office in Europe to ensure appropriate coverage of trade-related OECD activities.

    The major tasks of the Regional Office for Asia and the Pacific in Tokyo include enhancing the IMF’s surveillance in Asia by analyzing financial market developments and facilitating the IMF’s dialogue with policymakers through various policy forums in the region. The Office maintains close contact with two regional organizations, the Asian Development Bank (AsDB) and the UN Economic and Social Commission for Asia and the Pacific (ESCAP), as well as with the World Bank’s Office in Japan. It facilitates the IMF’s participation in the Consultative Group meetings of donor nations held in the Asia and Pacific region. The Office is also the IMF’s contact point with such regional groupings as the Asia-Pacific Economic Cooperation (APEC); the Association of South East Asian Nations (ASEAN); the Manila Framework Group; and the South Pacific Forum (FORUM).

    The IMF’s offices outside headquarters collaborate with international and regional institutions on a range of other activities. For example, their staffs attend meetings, participate in seminars and expert groups, and exchange information and documents with regional institutions. The offices also maintain operational linkages with IMF management and technical experts from headquarters.

    During FY2000, the IMF actively participated in meetings and activities of various intergovernmental groups—including the Group of Seven, Group of Ten, Group of Twenty-Four, and the newly formed Financial Stability Forum (FSF) and the Group of Twenty. The FSF, of which the IMF is a member, was established by finance ministers and central bank governors of the Group of Seven countries in early 1999. It is mandated to promote international cooperation in financial market surveillance and international financial stability through the enhanced exchange of information (see Chapter 4). The IMF is also a member of the Group of Twenty, formed in September 1999 to provide ongoing consultation on matters pertaining to the international financial system. It consists of groups of countries representing both developed and emerging economies from every region of the globe.

    Relations with the United Nations

    Institutional contacts between the IMF and the UN have increased markedly over the past few years and collaboration with the UN intensified in FY2000. For instance, the Chairman of the Interim Committee (now the International Monetary and Financial Committee) and the Managing Director of the IMF briefed the Economic and Social Council (ECOSOC) following the 1999 Spring Meetings of the Interim Committee. Members of the Executive Board of the IMF met twice with ECOSOC ambassadors in an effort to improve the transparency of IMF policies and operations, as well as benefit from the perspectives of other international organizations on such topics as poverty eradication and debt relief. The IMF’s UN Office works to ensure increased participation by IMF staff in meetings and initiatives organized by UN committees and commissions. It coordinates the exchange of information and facilitates collaboration in the areas of social aspects of adjustment, the environment, capacity building, gender issues, sustainable development—as well as those issues likely to affect the formulation of macroeconomic, financial, and fiscal policies. The UN Office reports to the IMF Executive Board once a year on the deliberations of the General Assembly and the ECOSOC. Discussions of the 1999 session of the UN General Assembly (held in New York from September 14 to December 23, 1999) focused on globalization and interdependence, the international financial system, the eradication of poverty, and the external debt problem of developing countries. The IMF was invited to deepen its collaboration and dialogue with members of the UN system in these areas. The Annual Substantive Session of the ECOSOC (held in Geneva in July 1999) addressed the themes of the role of employment, poverty eradication, and the advancement of women. The IMF was urged to redouble its efforts to restructure the international monetary and financial system, in order to minimize future market instability and strengthen both the public and corporate sectors through wide dissemination of internationally agreed operational standards.

    Relations with the World Trade Organization

    Since the IMF and WTO signed their Cooperation Agreement in December 1996, coordination has continued to expand. The WTO Secretariat has been invited to send observers to meetings of the IMF Committee on Liaison with the WTO and certain meetings of the Executive Board. The IMF continues to confer with the WTO in connection with its Committee on Balance of Payments Restrictions consultations with member countries. On November 30, 1999, the heads of the IMF, World Bank, and WTO issued a joint statement to the Third WTO Ministerial Conference in Seattle, reiterating that the three organizations will continue to work closely together, and with their member governments, to increase the coherence of economic policymaking. The statement also emphasized that, in future WTO negotiations, institutional cooperation will focus on supporting the needs of developing countries, particularly those of the world’s poorest countries.

    Collaboration with the World Bank

    Both founded in the wake of the 1944 Bretton Woods Conference, the World Bank and the IMF have strong and lasting historic ties. As mandated in their respective Articles of Agreement and in the joint 1989 Concordat between them, each plays an important, complementary role in ensuring the world’s economic growth and stability. In recent years, the rapid pace of globalization and the increased size of international capital flows have pushed the two institutions to work ever more closely together, to monitor developments in the financial system and help member countries strengthen their financial systems, to prevent the onset of systemic crises and to address poverty and social sector problems.

    One measure of this enhanced cooperation was the creation, in 1998, of the Bank-IMF Financial Sector Liaison Committee (FSLC). In FY2000, the FSLC set out guidelines for collaboration between the Bank and the IMF in financial sector work. The goal is to expand information sharing and increase work program coordination so that limited resources can be most effectively deployed. A pilot project, the Financial Sector Assessment Program (FSAP), was initiated under the Committee’s auspices in May 1999. The FSAP seeks to provide better coverage and analysis of member countries’ financial systems through closer Bank-IMF collaboration; see Chapter 4.

    In addition to financial sector programs, the Bank and the IMF have placed added emphasis on addressing public sector reform and social sector issues. In its communique of September 26, 1999, the IMF’s Interim Committee endorsed the replacement of the Enhanced Structural Adjustment Facility (ESAF) with the Poverty Reduction and Growth Facility (PRGF). One cornerstone of this growth-oriented economic approach is the Poverty Reduction Strategy Paper (PRSP). These are prepared by each country, with assistance from the IMF and the World Bank, and both play a role in monitoring the implementation of country-owned poverty reduction strategies. A joint meeting of the Interim and Development Committees, also held on September 26, 1999, gave its support to the enhanced Initiative for Heavily Indebted Poor Countries (HIPC Initiative); see Chapter 5.

    A Joint Bank-IMF research seminar series was initiated in November 1999 to facilitate the exchange of information on topics of mutual concern. Both institutions conduct periodic consultations among senior staffs, participate in each other’s missions, attend each other’s meetings and share each other’s documents. Collaboration at the staff level, both in policy advice and in operational matters, is supported by the ongoing dialogue between IMF and World Bank management.

    Cooperation with Regional Development Banks

    Whether working to overcome crisis, alleviate poverty, or strengthen the global financial system, the IMF works closely with the world’s multilateral and regional developments banks. This collaboration includes formulation and implementation of policies in the economic and financial areas, release of information, and exchange of staff visits. In FY2000, the IMF worked with the AsDB to address the crisis in East Timor, with the European Bank for Reconstruction and Development (EBRD) to address the crisis in Kosovo, with the Inter-American Development Bank (IDB) to stabilize the situation in Ecuador, and with the African Development Bank (AfDB) to arrange the Summit Meeting of African Heads of State in Gabon. In addition, IMF staff regularly attends meetings, seminars and forums sponsored by other regional, economic, and financial organizations in Africa, Asia and the Pacific, Latin America and the Caribbean, and the Middle East. Representatives of multilateral creditors are invited to attend country-specific Executive Board discussions of matters related to the HIPC Initiative. Recently instituted enhancements to the PRGF-HIPC programs, strengthening the link between debt relief and poverty reduction, amplify the need for future cooperation.

    Role of IMF Management

    As the rapid pace of globalization continues, issues affecting the architecture of the world’s monetary and financial system require the increasing attention of IMF management. Close cooperation between the international financial institutions has assumed greater significance. IMF management plays an important role in promoting collaboration between financial, trade, and development organizations. The Managing Director and the Deputy Managing Directors work together to advance the views of the IMF in many international forums.

    On May 17, 1999, the Managing Director addressed the International General Meeting of the Pacific Basin Economic Council (PBEC) in Hong Kong SAR where he discussed how governments must adapt to ensure economic development in a globalized world. At the Twenty-Fourth Annual Conference of the International Organization of Securities Commissions (IOSCO) in Lisbon on May 25, 1999, he turned his attention to the quest for transparency and standards in twenty-first century financial systems. The Managing Director spoke at the International Monetary Conference in Philadelphia on June 8, 1999, on the private sector’s role in strengthening the global financial system. On July 5, 1999, he attended the High-Level Meeting of the ECOSOC in Geneva where he took up the issues of overcoming crisis, alleviating poverty, and serving peace. At the Confederal Board of the World Confederation of Labor in Washington on October 26, 1999, he directed his remarks at strengthening the links between economic and social policies. In Seattle, for the Third Ministerial Conference of the WTO, he offered the IMF’s perspective on the latest round of trade negotiations. The Managing Director provided both opening and concluding remarks at the Summit Meeting of African Heads of State in Libreville on January 18-19, 2000. At UNCTAD X in Bangkok on February 13, 2000, he called for a multilateral approach in addressing economic development and poverty reduction.

    Among the many conferences, meetings, and seminars attended by the IMF’s Deputy Managing Directors were the International Conference on Central Bank Policies in Macau on May 14, 1999; the Group of Seventy-Seven Preparatory Committee for UNCTAD X in Geneva on June 7, 1999; and the International Financial Institution Advisory Commission in Washington on February 2, 2000.

    Appendix V: External Relations

    During FY2000, the IMF stepped up efforts to enhance its external communications and better explain itself—and the policies of its members—to a wider audience. This intensified effort owed mainly to:

    • the increased transparency of the IMF demanded in recent years by the membership, and

    • the increase in public attention to the IMF’s activities, partly reflecting the institution’s more prominent role (its work in the transition process, in assisting the poorest countries, and with the crises in emerging market economies in Asia and elsewhere), but also reflecting more active attention by nongovernmental organizations (NGOs) and other bodies.

    Notwithstanding its efforts to enhance its external communications, the IMF faced continued criticism by the press, NGOs, member countries’ legislatures, the academic community, and the wider public—which was most visibly expressed by public demonstrations against the IMF and World Bank at the time of both institutions’ Spring 2000 meetings.

    To better explain itself in FY2000, the IMF devoted more staff resources to external relations; reorganized its press, media, and external communications function; accelerated its efforts to make more and more documents available on its public website and through its publications (Table V.1); engaged in more frequent and timely public discourse through regular speeches and press briefings by senior IMF management and by issuing additional explanatory materials; institutionalized a civic and community relations program; increased staff communications with parlimentarians representing a wide range of member countries; and worked to complete the new IMF Center, a public information and outreach facility at IMF headquarters, expected to open in early FY2001.

    Table V.1Publications Issued, Financial Year Ended April 30, 2000
    Reports and Other Documents
    Annual Report of the Executive Board for the Financial Year Ended April 30, 1999* (English, French, German, and Spanish). Free.
    Annual Report on Exchange Arrangements and Exchange Restrictions, 1999 $95; $47.50 to full-time university faculty members and students.
    Selected Decisions and Selected Documents of the IMF,* Twenty-Fourth Issue, June 30, 1999. Free.
    Summary Proceedings of the Fifty-Fourth Annual Meeting of the Board of Governors* (1999). Free.
    The IMF Committee on Balance of Payments Statistics, Annual Report, 1999.* Free.
    Periodic Publications
    Balance of Payments Statistics Yearbook

    Vol. 50, 1999. A two-part yearbook. $68 a year.
    Direction of Trade Statistics

    Quarterly, with yearbook. $110 a year; $55 to full-time university faculty members and students. $32 for yearbook only.
    Government Finance Statistics Yearbook

    Vol. 23, 1999 (introduction and titles of lines in English, French, and Spanish). $60.
    International Financial Statistics

    Monthly, with yearbook (English, French, and Spanish). $246 a year; $123 to full-time university faculty members and students. $65 for yearbook only. International Financial Statistics is also available on CD-ROM; price information is available on request.
    IMF Staff Papers*

    Three times a year. $56 a year; $28 to full-time university faculty members and students.
    Finance and Development*

    Quarterly (English, Arabic, Chinese, French, and Spanish). Free. Air-speed delivery, $20.
    IMF Survey*

    Twice monthly, once in December (English, French, and Spanish). Private firms and individuals are charged an annual rate of $79.
    Occasional Papers
    No. 176. Back to the Future: Postwar Reconstruction and Stabilization in Lebanon

    Edited by Sena Eken and Thomas Helbling.
    No. 177. Perspectives on Regional Unemployment in Europe

    By Paolo Mauro, Eswar Prasad, and Antonio Spilimbergo.
    No. 178. IMF-Supported Programs in Indonesia, Korea, and Thailand: A Preliminary Assessment

    By Timothy Lane, Atish Ghosh, Javier Hamann, Steven Phillips, Marianne Schulze-Ghattas, and Tsidi Tsikata.
    No. 179. Disinflation in Transition: 1993–97

    By Carlo Cottarelli and Peter Doyle.
    No. 180. Revenue Implications of Trade Liberalization

    By Liam Ebrill, Janet Stotsky, and Reint Gropp.
    No. 181. The Netherlands: Transforming a Market Economy

    By C. Maxwell Watson, Bas B. Bakker, Jan Kees Martijn, and Ioannis Halikias.
    No. 182. Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union

    By a staff team led by Liam Ebrill and Oleh Havrylyshyn.
    No. 183. Economic Reforms in Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan

    By Emine Gurgen, Harry Snoek, Jon Craig, Jimmy McHugh, Ivailo Izvorski, and Ron van Rooden.
    No. 184. Growth Experience in Transition Countries, 1990—98

    By Oleh Havrylyshyn, Thomas Wolf, Julian Berengaut, Marta Castello-Branco, Ron van Rooden, and Valerie Mercer-Blackman.
    No. 185. Oman Beyond the Oil Horizon: Policies Toward Sustainable Growth

    Edited by Ahsan Mansur and Volker Treichel.
    No. 186. Anticipating Balance of Payments Crises: The Role of Early Warning Systems

    By Andrew Berg, Eduardo Borensztein, Gian Maria Milesi-Ferretti, and Catherine Pattillo.
    No. 187. Philippines: Toward Sustainable and Rapid Growth, Recent Developments and the Agenda Ahead

    By Markus Rodlauer, Prakash Loungani, Vivek Arora, Charalambos Christofides, Enrique G. De la Piedra, Piyabha Kongsamut, Kristina Kostial, Victoria Summers, and Athanasios Vamvakidis.
    No. 188. Financial Sector Crisis and Restructuring: Lessons from Asia

    By Carl-Johan Lindgren, Tomas J.T. Balino, Charles Enoch, Anne-Marie Gulde, Marc Quintyn, and Leslie Teo.
    No. 189. Current Account and External Sustainability in the Baltics, Russia, and Other Countries of the Former Soviet Union

    By Donal McGettigan.
    No. 190. Capital Controls: Country Experiences with Their Use and Liberalization

    By Akira Ariyoshi, Karl Habermeier, Bernard Laurens, Inci Ötker-Robe, Jorge Ivan Canales Kriljenko, and Andrei Kirilenko.
    No. 191. Social Issues in IMF-Supported Programs

    By Sanjeev Gupta, Louis Dicks-Mireaux, Ritha Khemani, Calvin McDonald, and Marijn Verhoeven.
    Occasional Papers Nos. 154-191 are available for $18 each, with a price of $15 each to full-time university faculty members and students.
    World Economic and Financial Surveys
    World Economic Outlook *

    A Survey by the Staff of the International Monetary Fund.

    Twice a year (May and October) (Arabic, English, French, and Spanish). $36; $25 to full-time university faculty members and students.
    International Capital Markets: Developments, Prospects, and Key Policy Issues

    By a staff team led by Charles Adams, Donald J. Mathieson, and Garry Schinasi. $25; $20 to full-time university faculty members and students.
    Exchange Rate Arrangements and Currency Convertibility: Developments and Issues

    By a staff team led by Barry Johnston. $25; $20 to full-time university faculty members and students.
    Books and Seminar Volumes
    Africa: Adjusting to the Challenges of Globalization

    Edited by Laura Wallace.

    Current Developments in Monetary and Financial Law, Volume 1

    By the IMF Legal Department.

    Economic Adjustment and Reform in Low-Income Countries: Studies by Staff of the IMF

    Edited by Hugh Bredenkamp and Susan Schadler.

    Economic Policy and Equity

    Edited by Vito Tanzi, Ke-young Chu, and Sanjeev Gupta.

    External Evaluation of IMF Economic Research*

    By a Group of Independent Experts.

    External Evaluation of IMF Surveillance*

    By a Group of Independent Experts.

    Financial Programming and Policy: The Case of Turkey

    By Richard Barth and William Hemphill, with contributions from Irina Aganina, Susan George, Joshua Greene, Caryl McNeilly, and Jukka Paljarvi.

    Orderly and Effective Insolvency Procedures: Key Issues

    By the IMF Legal Department.

    Post-Bubble Blues: How Japan Responded to Asset Price Collapse

    Edited by Charles Collyns and Tamim Bayoumi.

    Programmation financiere: Methodes et application a la Tunisie

    By Roland Daumont, Mario de Zamaröczy, Philippe Calliet, and Bernard Ziller, with contributions by Malangu Kabedi-Mbuyi.

    The Changing Role of Export Credit Agencies

    By Malcolm Stephens.

    Transforming Financial Systems in the Baltics, Russia, and Other Countries of the Former Soviet Union

    Edited by Malcolm Knight, Arne B. Petersen, and Robert T. Price.

    West Bank and Gaza Strip: Economic Developments in the Five Years Since Oslo

    By Patricia Alonso-Gamo, Max Alier, Thomas Baunsgaard, and Ulric Erickson von Allmeny

    Economic Issues*
    No. 17. Liberalizing Capital Movements: Some Analytical Issues.

    By Barry Eichengreen, Michael Mussa, Giovanni Dell’Ariccia, Enrica Detragiache, Gian Maria Milesi-Feretti, and Andrew Tweedie. (English and French). Free.
    No. 18. Privatization in Transition Countries: Lessons of the First Decade

    By Oleh Havrylyshyn and Donal McGettigan. (English and French). Free.
    No. 19. Hedge Funds: What Do We Really Know?

    By Barry Eichengreen and Donald Mathieson.

    (English and French). Free.
    No. 45. Financial Organization and Operations of the IMF, Fifth Edition

    By the IMF Treasurer’s Department.

    (English, French, and Spanish). Free.
    No. 51. Debt Relief for Low-Income Countries: The Enhanced HIPC Initiative

    By David Andrews, Anthony R. Boote, Syed S. Rizavi, and Sukhwinder Singh.

    (English, French, and Spanish). Free.
    From Crisis to a New Recovery

    Excerpts from Selected Addresses by Michel Camdessus.

    (English, French, and Spanish). Free.
    Integration and Growth in a Globalized World Economy

    Four Commentaries by Alassane D. Ouattara.

    (English and French). Free.
    The IMF and Human Development: A Dialogue with Civil Society

    By Michel Camdessus. Free.
    Research Activities of the International Monetary FundJanuary 1991-December 1998*

    Prepared by the Interdepartmental Working Group on Fund Policy Advice. Free.
    Working Papers and Policy Discussion Papers*
    IMF Working Papers and Policy Discussion Papers are designed to make IMF staff research available to a wider audience. They represent work in progress and reflect the views of the individual authors rather than those of the IMF.
    Working Papers 99/62-99/178 and 00/1-00/85 were issued in FY2000.

    $7 each; $210 for annual subscription.
    Policy Discussion Papers 99/4-99/8 and 00/1-00/3 were issued in FY2000.

    $7 each; $80 for annual subscription.
    IMF Economic Reviews (Public Information Notices/PINs), Nos. 1999:2 and 1999:3. Free. Series discontinued.
    Staff Country Reports*
    IMF Staff Country Reports comprise comprehensive material on economic developments and trends in member countries. The reports are prepared by IMF staff missions as background information for the periodic consultations with members. They consist of reports on recent economic developments, selected issues, background papers, and statistical annexes and appendices.
    Staff Country Reports 99/35-99/145 and 00/1-00/62 were issued in FY2000.

    $15 each.
    Copies of many IMF publications appear in full text on the IMF website; hard copies of all publications may be obtained from Publication Services, International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431, U.S.A.:Telephone: (202) 623-7430Telefax: (202) 623-7201E-mail: publications@imf.orgInternet: http://www.imf.orgAdditional information about the IMF and its publications—including the current Publications Catalog, a searchable IMF Publications Database, and ordering information and forms—is available on the IMF website (

    Available in English and selected other languages in full text on the IMF’s website.

    In addition, during the financial year and to assist in these efforts, the IMF commissioned—on the advice of the Executive Board—studies by external consultants of the way in which the IMF is perceived by different groups, with the aim of making the IMF’s public communication more proactive and improving the way the IMF’s work and message are transmitted and understood. The findings of these studies can be grouped under the following categories:

    Communications with the Public

    • Many members of the media, business, civil society, and academia lacked an understanding of the IMF’s work.

    • The IMF should better focus and coordinate its public output, and make its external communications proactive.

    Communications with Financial Markets

    • The IMF’s credibility has apparently eroded, in part because of perceived policy mistakes, but also because of weaknesses in its communications with markets.

    • To regain credibility, the IMF should institutionalize its contacts with the financial markets, become more attuned to regional interests and sensitivities, and make its public statements and publications more user-friendly.

    Communications with the U.S. Congress

    • Although the IMF had made improvements—greater openness, especially through the expanded public website—shortcomings remained.

    • The IMF must respond to criticisms from across the political spectrum, not only to opponents or supporters.

    • The IMF needs to become more active in its liaison with the U.S. Congress, including with key congressional staff.

    Media Operations

    • The technical and nuanced language of the IMF is an obstacle to transparency.

    • The IMF needs to upgrade the level of services in the newsroom during its twice-yearly ministerial meetings.

    • The increased publication of IMF documents, and thus increased transparency, has created greater demand among the media for interpretation, analysis, and perspective by IMF staff.

    The Executive Board met in February 2000 to discuss these findings and actions proposed by IMF staff to address them. Executive Directors welcomed improvements in the IMF’s communications policy since the July 1998 Board discussion of the issue. They agreed on the need to strengthen further the IMF’s external communications, and to provide resources for carrying out a reinforced strategy.

    Directors noted that the outside assessments of the IMF’s external communications in 1999 undertaken by consultants had been valuable. The findings indicated the challenges that the IMF must address to communicate more effectively with the public. Most Directors broadly concurred with the overall conclusions of the various studies that the IMF suffers external communications problems and is viewed less favorably by the public than are comparable international organizations, and that these forces can undermine the effectiveness of its operational work.

    Directors recognized, however, that the IMF’s mandate inevitably contrains its popularity. Directors generally agreed with the consultants’ findings that the IMF’s external communications problems can be addressed through broader, deeper, and more proactive efforts. They also recognized that the increased openness expected by the membership of the IMF will place even greater demands on the IMF’s external relations function, and require improved coordination of external communications activities among IMF staff. Indeed, Directors underlined the need for an institution-wide effort to improve internal communication, including an important role for the Executive Board.

    Directors considered that the plan of action proposed by the staff reflected well the consultants’ recommendations, the views of senior staff and Executive Directors, and guidance from management. Some Directors, however, asked that the links between the current and proposed use of resources and the consultants’ recommendations be examined at greater length. Directors welcomed many of the initiatives proposed in the plan. They saw most of the proposed measures and actions as having the potential to contribute to preserving and enhancing the IMF’s credibility, which Directors had singled out in July 1998 as the most important goal of the strategy to strengthen external communications.

    In particular, the Board agreed on the immense public communications value of the IMF’s website, and on the need to increase the output of material for the print media and the public explaining the IMF’s work, and to sharpen the “voice of the Fund.” Among other valuable elements of an enhanced communications strategy, Directors referred to the need for greater outreach to civil society working with the national authorities concerned, strengthening the IMF’s publications program, engaging member countries’ legislatures in coordination with the Executive Board, and improving relations with the private financial sector. They also underscored that the IMF’s efforts should be as broadly based and wide-ranging as possible, especially in view of the IMF’s near universal membership. Directors noted that a number of the elements of the action plan had begun to be implemented using existing resources, with positive results and feedback.

    In support of the need to strengthen IMF communications, and in particular the various measures proposed by the IMF’s External Relations Department, Directors approved an additional 10 positions for the department in FY2001.

    Appendix VI: Press Communiqués of the Interim Committee, the International Monetary and Financial Committee, and the Development Committee

    Interim Committee of the Board of Governors of the International Monetary System


    Fifty-Third Meeting, Washington, D.C., September 26, 1999

    1. The Interim Committee held its fifty-third meeting in Washington, D.C. on September 26, 1999, under the Chairmanship of Mr. Gordon Brown, Chancellor of the Exchequer of the United Kingdom. The Committee expresses its appreciation to the outgoing Chairman, Mr. Carlo Azeglio Ciampi, formerly Minister of the Treasury of Italy and currently President of Italy, for his invaluable contribution to the Committee’s work.

    Global Economic and Financial Conditions

    2. The Committee welcomes the improvement in global economic and financial conditions since the beginning of this year. It has reviewed the challenges required to ensure that the recovery is sustained.

    In many emerging market economies and developing countries, raising growth rates on a lasting basis will require not only sustained growth in industrial countries, but also key structural reforms. These include banking reform, corporate restructuring, tax reform and tax administration, establishment of effective legal systems, protection of property rights, and improved governance.

    • Recovery is taking hold in crisis-affected countries in Asia, aided by supportive fiscal policies, accommodative monetary policies, and a return of financial market confidence. Financial sector restructuring is generally moving ahead, but further efforts are needed to complete the task. In addition, corporate restructuring and institutional reforms should be accelerated. Indonesia’s recovery has been interrupted by structural and political problems that will need to be resolved speedily in order for economic recovery and reform to resume. China and India have weathered the crisis relatively well and economic performance has been sustained, but significant challenges in some areas remain to be addressed.

    • In Russia, the Committee welcomes the efforts of the IMF to work with the Russian authorities to encourage macro-economic stabilization, the continuation of reforms, and the further integration of Russia into the global economy. While acknowledging the recent initial measures to restructure the banking system, strengthen the integrity of financial policies and institutions, and improve governance and transparency, the Committee stresses the urgent need for further progress. It calls on the IMF to work with the Russian authorities to strengthen reforms in these and other areas that are important for economic growth.

    • In Brazil, strict implementation of the Fund-supported program has restored confidence, and the outlook for some other countries in Latin America has also improved. In many other countries in this region, adjustment and reform efforts still require further strengthening.

    • In the Middle East and Africa, countries that have benefited from the improvement in commodity prices, particularly for oil, have a renewed opportunity to accelerate progress on fiscal consolidation and diversification of their economies.

    • Heavily-indebted sub-Saharan African countries should take full and prompt advantage of the opportunity offered by debt relief under the enhanced HIPC Initiative to intensify and press ahead with reforms, including allocating additional resources for, and improving the efficiency of, spending aimed at poverty reduction. Outward-oriented strategies and peaceful resolution of armed conflicts are critical for sustaining economic development and higher growth.

    • The tragic events that took place in Kosovo this year have had severe negative economic effects on other countries in the region. Coherent stabilization and reform policies supported by the international financial institutions are important for further economic development in the region. Therefore the Committee calls upon the IMF to continue its strengthened support in the form of programs and technical assistance to the countries involved.

    A sustained pickup in domestic demand in Europe and Japan, together with medium-term growth in the U.S. in line with potential, will help to achieve a more balanced pattern of growth among the major industrial countries.

    • The Committee welcomes the continued strong performance of the U.S. economy that has been critical in supporting global activity. Policies should continue to be directed to sustaining growth on a long-term basis by maintaining a strong fiscal position and increasing national saving.

    • The Committee welcomes the growth of the Japanese economy in the first two quarters of 1999, which was supported by a rebound in consumer demand. Given that the prospect for continuing recovery in private demand remains uncertain, however, it urges the authorities to maintain a supportive stance of fiscal and monetary policies through a supplementary budget of appropriate size while, in the context of their zero interest rate policy, providing ample liquidity until deflationary concerns are dispelled. It is also critical to continue efforts to strengthen the banking system and foster corporate restructuring in order to achieve sustained growth in Japan, which should facilitate needed medium-term fiscal consolidation.

    • The Committee is also encouraged by the pickup in growth in Europe in the context of price stability. While monetary conditions in the euro area are accommodative and should remain supportive, further efforts toward fiscal consolidation and structural reform, especially regarding the tax system and the labor and product markets, would improve prospects for sustained growth and a further reduction in unemployment.

    3. The Committee emphasizes the importance of open and competitive markets as a key component of efforts to sustain growth and stability in the global economy. The proposed launch of new trade negotiations in Seattle later this year is an important opportunity to make further progress in this direction. Further broad-based liberalization in a strengthened rules-based multilateral trading system will help underpin global growth and stability. To ensure that the benefits of liberalized trade and investment are fully realized and shared, the Committee encourages the Fund to work with the Bank and the WTO to strengthen their programs of work to achieve better coherence in global policy making. It recognizes that coordinated programs of support for developing countries, including targeted technical assistance and policy advice, will support them in meeting WTO commitments and implementing current agreements.

    4. The Committee notes that, in fostering economic growth through appropriate macroeconomic policies and structural reforms, the IMF, in close cooperation with the World Bank, and consistent with their mandates, must also take into account the direct social consequences of adjustment and reform efforts as well as the complementarity of macroeconomic and social policies for long-term growth and improved social indicators.

    Poverty Reduction Initiatives

    5. The Committee endorses the proposed replacement of the Enhanced Structural Adjustment Facility (ESAF) by the new Poverty Reduction and Growth Facility, which aims at making poverty reduction efforts among low-income members a key and more explicit element of a renewed growth-oriented economic strategy. The cornerstones of the new approach, which should continue to be based on sound macroeconomic policies, are as follows:

    • A comprehensive Poverty Reduction Strategy Paper (PRSP) will be prepared by each country, with assistance from the World Bank and the IMF, and with strong country ownership based on public partnership, to guide the design of programs; the PRSP will need the approval of both Bank and Fund Boards.

    • Social and sectoral programs aimed at poverty reduction will be taken fully into account in the design of economic policies for promoting faster sustainable growth.

    • Greater emphasis will be accorded to good governance, in particular in all government activities, through greater transparency, effective monitoring procedures, anti-corruption initiatives, accountability, and the involvement of all sectors of society.

    • High priority will be accorded to key reform measures critical to achieving governments’ social goals.

    6. The Committee takes note of the crucial role to be played by the World Bank and other relevant international organizations in helping governments develop and monitor the implementation of their poverty reduction strategies. It endorses the proposal that PRSPs, as they are developed, provide the basis for all IDA and Poverty Reduction and Growth Facility lending operations and closer Bank-IMF collaboration.

    7. The Committee welcomes the joint meeting of the Interim and Development Committees, held earlier today, on the enhanced HIPC Initiative. The proposals made by the Bank and the IMF to this end, which build upon wide-ranging comments from civil society and the international community, are aimed at providing faster, deeper, and broader debt relief and strengthening the link between debt relief and poverty reduction.

    8. The Committee welcomes the agreement on the financing of the IMF’s participation in the HIPC Initiative and continued concessional lending by the IMF for growth and poverty reduction in its low income member countries. It highly appreciates the financial support provided by a wide cross-section of the IMF’s membership through bilateral contributions and endorses the decision adopted by the Executive Board for the Fund’s participation. The Committee considers that the off-market transactions of up to 14 million ounces of fine gold by the IMF that are envisaged will be a one-time operation of a highly exceptional nature. This is part of a broader financing package to allow the IMF to contribute to the resolution of the debt problems of the HIPCs at the turn of the millennium and to the continuation of concessional operations to support countries’ efforts to achieve sustained growth and poverty reduction. The Committee endorses the Executive Board’s recommendation that the Board of Governors adopt a Resolution to this effect.


    9. The Committee welcomes the progressive translation of broad principles into concrete actions in developing and monitoring standards of importance to the international monetary and financial system.

    • The Committee encourages the IMF to continue its collaborative efforts with the World Bank and other relevant organizations to complete work on the Financial Stability Forum’s compendium of standards.

    • The Committee urges all 47 Special Data Dissemination Standard (SDDS) subscribers to continue to enhance their statistical practices, and to report data on international reserves and related liabilities according to the agreed reserves template by March 2000. It encourages further work by the Fund on the SDDS, including on strengthening external debt data and developing macro-prudential indicators. It looks forward to the launch of the operational phase of the General Data Dissemination System (GDDS) early next year. The Committee also urges the IMF and member countries to press ahead with efforts to improve the timeliness and comprehensiveness of data on capital flows. The IMF should provide technical assistance to enhance the quality and timeliness of data. Country authorities and relevant international organizations should also take urgent action to improve data on social spending and social indicators.

    • The Committee adopts the attached Code of Good Practices on Transparency in Monetary and Financial Policies: Declaration of Principles as a guide for members to increase transparency in the conduct of these policies. The Committee urges all members to implement the new Code as well as the previously agreed Code of Good Practices on Fiscal Transparency.

    • The Committee welcomes the assessments of the implementation of the Basel Core Principles that have been made in the course of IMF surveillance and technical assistance, and urges that these be embedded into regular surveillance activities. It notes the work under way by the Basel Committee on Banking Supervision to review the 1988 Capital Accord and urges the Basle Committee to complete that review. It encourages the IMF to continue to support this process.

    10. The Committee encourages the IMF, in cooperation with other standard-setting bodies, to continue to experiment with assessments of members’ observance of international standards and codes of good practice and invites the Executive Board to consider whether to integrate such assessments into the surveillance process.

    11. The Committee reiterates the importance of greater transparency in policy-making. With respect to IMF practices and members’ policies, it strongly welcomes the steps taken:

    • The widespread release of Public Information Notices (PINs), for which there is an agreement on presumption of publication; the public release of many IMF policy papers and the associated summaries of Board discussions; and the release of the external evaluators’ reports on IMF surveillance and economic research activities;

    • The decisions of 46 countries that have already volunteered to participate in the pilot program for the release of Article IV reports, with 15 reports already available on the IMF Website;

    • The agreement to establish a presumption in favor of publication of Letters of Intent, Memoranda of Economic and Financial Policies, and Policy Framework Papers, and the widespread release of documents that has occurred since the policy of greater transparency was adopted; and

    • The efforts to ascertain the views of the private sector on the experimental transparency reports.

    12. The Committee encourages further actions to make IMF practices and members’ policies more transparent without compromising the IMF’s role as confidential advisor.

    13. Experience in a few cases has highlighted the importance of promoting transparency and accountability especially when IMF resources are being used. In this connection, the Committee notes that the implications of corruption and money laundering raise important issues for the credibility and effectiveness of IMF programs, and calls on the IMF to perform an authoritative review of its procedures and controls to identify ways to strengthen safeguards on the use of its funds and to report at its next meeting. The Committee considers that further actions for strengthening governance at the national and international levels are crucial. In the financial area, governments must maintain strong internal financial controls and tighten supervision and regulation of domestic financial institutions and off-shore banking centers, including measures to deter money laundering. The Committee urges the IMF to enhance its support for members’ efforts in these areas, building on its guidelines and other international standards for fostering good governance and transparency in all member countries, including through the application of the codes of good practice that the membership has established in the fiscal and monetary areas.

    14. The Committee welcomes the progress made in financial sector reform and banking system restructuring in the context of IMF surveillance, technical assistance, and programs. It looks forward to the continued collaborative work of the IMF, the World Bank, and other institutions, including on the pilot Financial Sector Assessment Program that should facilitate early detection of financial system weaknesses and support a better coordinated dialogue with national authorities. The Committee encourages countries that have not done so to participate in the pilot program.

    15. The Committee welcomes the recent independent, external evaluations of IMF surveillance and research activities, and encourages the Executive Board to examine the recommendations of the former further in the context of the next internal review in late 1999. The Committee also reaffirms the importance of independent evaluations of the Fund’s operations and policies.

    16. The Committee reiterates the importance of ongoing efforts to involve the private sector in forestalling and resolving financial crises, and notes the progress achieved in securing the involvement of the private sector in individual cases. In this connection, the Committee considers that the balance of the various considerations reflected in the report by G-7 Finance Ministers to the Köln Economic Summit provides a helpful framework within which the international community can work to address individual cases that may arise. The Committee asks the Executive Board to build on this framework and to report at the Committee’s next meeting on the ways in which the broad principles have been implemented.

    17. The Committee considers that increased mobility of capital has raised the requirements, in terms of both policy adaptability and institutional preparedness, for maintaining a fixed exchange rate regime. That said, members should be able to choose a regime that is appropriate to their particular circumstances and longer-term strategy. The choice of exchange rate regime and the implementation of supporting policies are critical for countries’ economic development and financial stability, and in some cases potentially for the world economy. In all cases, IMF programs and surveillance should further focus on consistency of macroeconomic and other policies and institutional arrangements with the chosen exchange rate regime. The IMF should assist members to adapt to a world of global financial flows. The Committee encourages the Executive Board to continue to consider these matters, and to report to the Committee on its work.

    18. Persistent and sizeable capital inflows can be highly destabilizing particularly if they are intermediated by poorly regulated and unsupervised financial institutions. In this context, the Committee welcomes the IMF’s recent work on the appropriate pace and sequencing of capital account opening, which has led to a fuller understanding of the conditions for orderly and sustainable liberalization, and has broadly confirmed earlier conclusions that, over the long term, open capital flows accompanied by appropriate prudential measures will benefit the world economy. The Committee encourages the IMF to build on its examination of individual countries’ use and liberalization of controls, paying particular attention to the relationship between capital account liberalization and financial sector stability.

    19. The Committee calls on the IMF and World Bank to work together, in cooperation with national debt management experts, to develop a set of best practices in public debt management by the spring to assist countries in their efforts to reduce vulnerability.

    20. The Committee encourages all members to continue to work on preventive action and to put in place millennium contingency plans, noting that, although business, financial institutions, and government agencies around the world have made considerable progress in preparing computer systems, a risk remains that Y2K problems will be anticipated or will arise, with potential negative consequences for growth, international trade, and international capital flows. To help forestall, and if necessary resolve, possible balance of payments problems related to the Y2K phenomenon, the Committee endorses the Executive Board’s decision to introduce a temporary new facility for providing outright short-term access to IMF resources to members facing identifiable Y2K-related balance of payments needs.

    21. The Committee endorses the Executive Board’s recommendation that the Board of Governors adopt a Resolution transforming the Interim Committee into the International Monetary and Financial Committee and strengthening its role as the advisory committee of the Board of Governors.

    * * *

    22. The next meeting of the Committee will be held in Washington, D.C. on April 16, 2000.

    Attachment: International Monetary Fund—Code of Good Practices on Transparency in Monetary and Financial Policies: Declaration of Principles


    1. In the context of strengthening the architecture of the international monetary and financial system, the Interim Committee in its April and October 1998 Communiqués called on the Fund to develop a code of transparency practices for monetary and financial policies, in cooperation with appropriate institutions. The Fund, working together with the Bank for International Settlements, and in consultation with a representative group of central banks, financial agencies, other relevant international and regional organizations,1 and selected academic experts, has developed a Code of Good Practices on Transparency in Monetary and Financial Policies. The Code parallels the Code of Good Practices in Fiscal Transparency developed by the Fund and endorsed by the Interim Committee in April 1998.

    2. The Code of Good Practices on Transparency in Monetary and Financial Policies identifies desirable transparency practices for central banks in their conduct of monetary policy and for central banks and other financial agencies in their conduct of financial policies. The definitions of “central bank,” “financial agencies,” “financial policies,” and “government” as used in this Code are given in the attached Annex.

    3. For purposes of the Code, transparency refers to an environment in which the objectives of policy, its legal, institutional, and economic framework, policy decisions and their rationale, data and information related to monetary and financial policies, and the terms of agencies’ accountability, are provided to the public on an understandable, accessible and timely basis. Thus, the transparency practices listed in the Code focus on: (1) clarity of roles, responsibilities and objectives of central banks and financial agencies; (2) the processes for formulating and reporting of monetary policy decisions by the central bank and of financial policies by financial agencies; (3) public availability of information on monetary and financial policies; and (4) accountability and assurances of integrity by the central bank and financial agencies.

    4. The case for transparency of monetary and financial policies is based on two main premises. First, the effectiveness of monetary and financial policies can be strengthened if the goals and instruments of policy are known to the public and if the authorities can make a credible commitment to meeting them. In making available more information about monetary and financial policies, good transparency practices promote the potential efficiency of markets. Second, good governance calls for central banks and financial agencies to be accountable, particularly where the monetary and financial authorities are granted a high degree of autonomy. In cases when conflicts might arise between or within government units (e.g., if the central bank or a financial agency acts as both owner and financial supervisor of a financial institution or if the responsibilities for monetary and foreign exchange policy are shared), transparency in the mandate and clear rules and procedures in the operations of the agencies can help in their resolution, strengthen governance, and facilitate policy consistency.

    5. In making the objectives of monetary policy public, the central bank enhances the public’s understanding of what it is seeking to achieve, and provides a context for articulating its own policy choices, thereby contributing to the effectiveness of monetary policy. Further, by providing the private sector with a clear description of the considerations guiding monetary policy decisions, transparency about the policy process makes the monetary policy transmission mechanism generally more effective, in part by ensuring that market expectations can be formed more efficiently. By providing the public with adequate information about its activities, the central bank can establish a mechanism for strengthening its credibility by matching its actions to its public statements.

    6. Transparency by financial agencies, particularly in clarifying their objectives, should also contribute to policy effectiveness by enabling financial market participants to assess better the context of financial policies, thereby reducing uncertainty in the decision making of market participants. Moreover, by enabling market participants and the general public to understand and evaluate financial policies, transparency is likely to be conducive to good policy making. This can help to promote financial as well as systemic stability. Transparent descriptions of the policy formulation process provide the public with an understanding of the rules of the game. The release of adequate information to the public on the activities of financial agencies provides an additional mechanism for enhancing the credibility of their actions. There may also be circumstances when public accountability of decisions by financial agencies can reduce the potential for moral hazard.

    7. The benefits for countries adopting good transparency practices in monetary and financial policies have to be weighed against the potential costs. In situations where increased transparency in monetary and financial policies could endanger the effectiveness of policies, or be potentially harmful to market stability or the legitimate interests of supervised and other entities, it may be appropriate to limit the extent of such transparency. Limiting transparency in selected areas needs to be seen, however, in the context of a generally transparent environment.

    8. In the case of monetary policy, the rationale for limiting some types of disclosure arises because it could adversely affect the decision-making process and the effectiveness of policies. Similarly, exchange rate policy considerations, notably, but not exclusively, in countries with fixed exchange rate regimes, may provide justification for limiting certain disclosure practices. For example, extensive disclosure requirements about internal policy discussion on money and exchange market operations might disrupt markets, constrain the free flow of discussion by policymakers, or prevent the adoption of contingency plans. Thus, it might be inappropriate for central banks to disclose internal deliberations and documentation, and there are circumstances in which it would not be appropriate for central banks to disclose their near-term monetary and exchange rate policy implementation tactics and provide detailed information on foreign exchange operations. Similarly, there may be good reasons for the central bank (and financial agencies) not to make public their contingency plans, including possible emergency lending.

    9. Additional concerns could be posed by some aspects of the transparency of financial policies. Moral hazard, market discipline, and financial market stability considerations may justify limiting both the content and timing of the disclosure of some corrective actions and emergency lending decisions, and information pertaining to market and firm-specific conditions. In order to maintain access to sensitive information from market participants, there is also a need to safeguard the confidentiality and privacy of information on individual firms (commonly referred to as “commercial confidentiality”). Similarly, it may be inappropriate for financial authorities to make public their supervisory deliberations and enforcement actions related to individual financial institutions, markets, and individuals.

    10. Transparency practices differ not only in substance, but also in form. With regard to informing the public about monetary and financial institutions and their policies, an important issue concerns the modalities that these public disclosures should take. In particular with regard to monetary policy, should transparency practices have a legislative basis in a central bank law, or be based in other legislation or regulation, or be adopted through other means? The Code takes a pragmatic approach to this issue and recognizes that a variety of arrangements can lead to good transparency practices. On matters pertaining to the roles, responsibilities, and objectives of central banks (and for principal financial regulatory agencies), it recommends that key features be specified in the authorizing legislation (e.g., a central bank law). Specifying some of these practices in legislation gives them particular prominence and avoids ad hoc and frequent changes to these important aspects of the operations of central banks and relevant financial agencies. Information about other transparency aspects, such as how policy is formulated and implemented and the provision of information, can be presented in a more flexible manner. However, it is important that such information be readily accessible, so that the public can with reasonable effort obtain and assimilate the information.

    11. In the context of good governance and accountability, as well as the promotion of efficient markets, reference to the public in this code should ideally encompass all interested individuals and institutions. In some cases, particularly for financial policies, it may be expedient for the purposes of administering or implementing certain regulations and policies to define the concept of the public more narrowly to refer only to those individuals and institutions that are most directly affected by the regulations and policies in question.

    12. The focus of the Code is on transparency. While good transparency practices for the formulation and reporting of monetary and financial policies help to contribute to the adoption of sound policies, the Code is not designed to offer judgments on the appropriateness or desirability of specific monetary or financial policies or frameworks that countries should adopt. Transparency is not an end in itself, nor is transparency a substitute for pursuing sound policies; rather, transparency and sound policies are better seen as complements. In the realm of financial policies, there are complements to this code that go beyond transparency to promote good policies, notably the Core Principles for Effective Banking Supervision formulated by the Basel Committee for Banking Supervision, the Objectives and Principles of Securities Regulation formulated by the International Organization of Securities Commissions (IOSCO), and standards being developed by the Committee on Payment and Settlement Systems (CPSS), the International Association of Insurance Supervisors (IAIS), and the International Accounting Standards Committee (IASC). As these and other financial sector groupings develop and make significant adjustments in their principles and standards as they relate to transparency practices for financial agencies (e.g., in data dissemination requirements for financial agencies), this Code may have to be adjusted accordingly.

    13. The Code is directed at the transparency requirements of central banks and financial agencies, not at the transparency procedures relating to firms and individual institutions. However, the benefits of transparency for monetary and financial policies may be fostered by appropriate policies to promote transparency for markets in general, for the institutions that are being supervised, and for self regulatory organizations.

    14. Monetary and financial policies are interrelated and often mutually reinforcing, with the health of the financial system affecting the conduct of monetary policy and vice versa. However, the institutional arrangements for these two types of policies differ considerably, particularly with regard to their roles, responsibilities, and objectives and their policy formulation and implementation processes. To take account of this, the Code is separated into two parts: good transparency practices for monetary policy by central banks; and good transparency practices for financial policies by financial agencies. The basic elements of transparency for both policies are, however, similar. It should be recognized that not all transparency practices are equally applicable to all financial agencies, and the transparency objectives among different financial sectors vary. For some, the emphasis is on market efficiency considerations, for others the focus is on market and systemic stability, while for others the principal consideration is client-asset protection.

    15. The operation of a country’s payment system affects the conduct of monetary policies and the functioning of the financial system, and the design of payment systems has implications for systemic stability. The institutional structures of the payment system, however, are often significantly more complex than for monetary and other financial policies, and differ considerably across countries. In many instances, the operation of a country’s payment system is split between the public and private sectors, including self-regulatory bodies. Nevertheless, most of the transparency practices listed in the Code for financial agencies are applicable for the roles and functions of central banks or other relevant public agencies exercising responsibility for overseeing the nation’s payment systems. The coverage of transparency practices for financial policies in the Code includes those for the operation of systemically important components of the nation’s payment system, and, where appropriate, makes allowance for the special nature of the payment system’s operations (e.g., 5.3).

    16. The Code is of sufficient breadth to span and be applied to a wide range of monetary and financial frameworks, and thus to the full range of the Fund membership. Elements of the Code are drawn from a review of good transparency practices used in a number of countries and discussed in the professional literature. The Code thus represents a distillation of concepts and practices that are already in use and for which there is a record of experience. The manner in which transparency is applied and achieved, however, may differ, reflecting different institutional arrangements with respect to monetary and financial policies and legal traditions. The good transparency practices contained in the Code will, therefore, have to be implemented flexibly and over time to take account of a country’s particular circumstances. A number of Fund members currently lack sufficient resources and the institutional capacity to implement all of the good transparency practices listed in the Code. These practices are included in the Code in the anticipation that countries would aspire over time to introduce such good practices.

    Good Transparency Practices for Monetary Policy by Central Banks

    I. Clarity of Roles, Responsibilities and Objectives of Central Banks for Monetary Policy

    • 1.1 The ultimate objective(s) and institutional framework of monetary policy should be clearly defined in relevant legislation or regulation, including, where appropriate, a central bank law.

    • 1.1.1 The ultimate objective(s) of monetary policy should be specified in legislation and publicly disclosed and explained.

    • 1.1.2 The responsibilities of the central bank should be specified in legislation.

    • 1.1.3 The legislation establishing the central bank should specify that the central bank has the authority to utilize monetary policy instruments to attain the policy objective(s).

    • 1.1.4 Institutional responsibility for foreign exchange policy should be publicly disclosed.

    • 1.1.5 The broad modalities of accountability for the conduct of monetary policy and for any other responsibilities assigned to the central bank should be specified in legislation.

    • 1.1.6 If, in exceptional circumstances, the government has the authority to override central bank policy decisions, the conditions under which this authority may be invoked and the manner in which it is publicly disclosed should be specified in legislation.

    • 1.1.7 The procedures for appointment, terms of office, and any general criteria for removal of the heads and members of the governing body of the central bank should be specified in legislation.

    • 1.2 The institutional relationship between monetary and fiscal operations should be clearly defined.2

    • 1.2.1 If credits, advances, or overdrafts to the government by the central bank are permitted, the conditions when they are permitted, and any limits thereof, should be publicly disclosed.

    • 1.2.2 The amounts and terms of credits, advances, or overdrafts to the government by the central bank and those of deposits of the government with the central bank should be publicly disclosed.

    • 1.2.3 The procedures for direct central bank participation in the primary markets for government securities, where permitted, and in the secondary markets, should be publicly disclosed.

    • 1.2.4 Central bank involvement in the rest of the economy (e.g., through equity ownership, membership on governing boards, procurement, or provision of services for fee) should be conducted in an open and public manner on the basis of clear principles and procedures.

    • 1.2.5 The manner in which central bank profits are allocated and how capital is maintained should be publicly disclosed.

    • 1.3 Agency roles performed by the central bank on behalf of the government should be clearly defined.

    • 1.3.1 Responsibilities, if any, of the central bank in (i) the management of domestic and external public debt and foreign exchange reserves, (ii) as banker to the government, (iii) as fiscal agent of the government, and (iv) as advisor on economic and financial policies and in the field of international cooperation, should be publicly disclosed.

    • 1.3.2 The allocation of responsibilities among the central bank, the ministry of finance, or a separate public agency,3 for the primary debt issues, secondary market arrangements, depository facilities, and clearing and settlement arrangements for trade in government securities, should be publicly disclosed.

    II. Open Process for Formulating and Reporting Monetary Policy Decisions

    • 2.1 The framework, instruments, and any targets that are used to pursue the objectives of monetary policy should be publicly disclosed and explained.

    • 2.1.1 The procedures and practices governing monetary policy instruments and operations should be publicly disclosed and explained.

    • 2.1.2 The rules and procedures for the central bank’s relationships and transactions with counterparties in its monetary operations and in the markets where it operates should be publicly disclosed.

    • 2.2 Where a permanent monetary policy making body meets to assess underlying economic developments, monitor progress toward achieving its monetary policy objective(s), and formulate policy for the period ahead, information on the composition, structure, and functions of that body should be publicly disclosed.

    • 2.2.1 If the policy making body has regularly scheduled meetings to assess underlying economic developments, monitor progress toward achieving its monetary policy objective(s), and formulate policy for the period ahead, the advance meeting schedule should be publicly disclosed.

    • 2.3 Changes in the setting of monetary policy instruments (other than fine-tuning measures) should be publicly announced and explained in a timely manner.

    • 2.3.1 The central bank should publicly disclose, with a preannounced maximum delay, the main considerations underlying its monetary policy decisions.

    • 2.4 The central bank should issue periodic public statements on progress toward achieving its monetary policy objective(s) as well as prospects for achieving them. The arrangements could differ depending on the monetary policy framework, including the exchange rate regime.

    • 2.4.1 The central bank should periodically present its monetary policy objectives to the public, specifying, inter alia, their rationale, quantitative targets and instruments where applicable, and the key underlying assumptions.

    • 2.4.2 The central bank should present to the public on a specified schedule a report on the evolving macroeconomic situation, and their implications for its monetary policy objective(s).

    • 2.5 For proposed substantive technical changes to the structure of monetary regulations, there should be a presumption in favor of public consultations, within an appropriate period.

    • 2.6 The regulations on data reporting by financial institutions to the central bank for monetary policy purposes should be publicly disclosed.

    III. Public Availability of Information on Monetary Policy

    • 3.1 Presentations and releases of central bank data should meet the standards related to coverage, periodicity, timeliness of data and access by the public that are consistent with the International Monetary Fund’s data dissemination standards.

    • 3.2 The central bank should publicly disclose its balance sheet on a preannounced schedule and, after a predetermined interval, publicly disclose selected information on its aggregate market transactions.

    • 3.2.1 Summary central bank balance sheets should be publicly disclosed on a frequent and preannounced schedule. Detailed central bank balance sheets prepared according to appropriate and publicly documented accounting standards should be publicly disclosed at least annually by the central bank.

    • 3.2.2 Information on the central bank’s monetary operations, including aggregate amounts and terms of refinance or other facilities (subject to the maintenance of commercial confidentiality) should be publicly disclosed on a preannounced schedule.

    • 3.2.3 Consistent with confidentiality and privacy of information on individual firms, aggregate information on emergency financial support by the central bank should be publicly disclosed through an appropriate central bank statement when such disclosure will not be disruptive to financial stability.

    • 3.2.4 Information about the country’s foreign exchange reserve assets, liabilities and commitments by the monetary authorities should be publicly disclosed on a preannounced schedule, consistent with the International Monetary Fund’s Data Dissemination Standards.

    • 3.3 The central bank should establish and maintain public information services.

    • 3.3.1 The central bank should have a publications program, including an Annual Report.

    • 3.3.2 Senior central bank officials should be ready to explain their institution’s objective(s) and performance to the public, and have a presumption in favor of releasing the text of their statements to the public.

    • 3.4 Texts of regulations issued by the central bank should be readily available to the public.

    IV. Accountability and Assurances of Integrity by the Central Bank

    • 4.1 Officials of the central bank should be available to appear before a designated public authority to report on the conduct of monetary policy, explain the policy objective(s) of their institution, describe their performance in achieving their objective(s), and, as appropriate, exchange views on the state of the economy and the financial system.

    • 4.2 The central bank should publicly disclose audited financial statements of its operations on a preannounced schedule.

    • 4.2.1 The financial statements should be audited by an independent auditor. Information on accounting policies and any qualification to the statements should be an integral part of the publicly disclosed financial statements.

    • 4.2.2 Internal governance procedures necessary to ensure the integrity of operations, including internal audit arrangements, should be publicly disclosed.

    • 4.3 Information on the expenses and revenues in operating the central bank should be publicly disclosed annually.

    • 4.4 Standards for the conduct of personal financial affairs of officials and staff of the central bank and rules to prevent exploitation of conflicts of interest, including any general fiduciary obligation, should be publicly disclosed.

    • 4.4.1 Information about legal protections for officials and staff of the central bank in the conduct of their official duties should be publicly disclosed.

    Good Transparency Practices for Financial Policies by Financial Agencies

    V. Clarity of Roles, Responsibilities and Objectives of Financial Agencies Responsible For Financial Policies4

    • 5.1 The broad objective(s) and institutional framework of financial agencies should be clearly defined, preferably in relevant legislation or regulation.

    • 5.1.1 The broad objective(s) of financial agencies should be publicly disclosed and explained.

    • 5.1.2 The responsibilities of the financial agencies and the authority to conduct financial policies should be publicly disclosed.

    • 5.1.3 Where applicable, the broad modalities of accountability for financial agencies should be publicly disclosed.

    • 5.1.4 Where applicable, the procedures for appointment, terms of office, and any general criteria for removal of the heads and members of the governing bodies of financial agencies should be publicly disclosed.

    • 5.2 The relationship between financial agencies should be publicly disclosed.

    • 5.3 The role of oversight agencies with regard to payment systems should be publicly disclosed.

    • 5.3.1 The agencies overseeing the payment system should promote the timely public disclosure of general policy principles (including risk management policies) that affect the robustness of systemically important payment systems.

    • 5.4 Where financial agencies have oversight responsibilities for self-regulatory organizations (e.g., payment systems), the relationship between them should be publicly disclosed.

    • 5.5 Where self-regulatory organizations are authorized to perform part of the regulatory and supervisory process, they should be guided by the same good transparency practices specified for financial agencies.

    VI. Open Process for Formulating and Reporting of Financial Policies

    • 6.1 The conduct of policies by financial agencies should be transparent, compatible with confidentiality considerations and the need to preserve the effectiveness of actions by regulatory and oversight agencies.

    • 6.1.1 The regulatory framework and operating procedures governing the conduct of financial policies should be publicly disclosed and explained.

    • 6.1.2 The regulations for financial reporting by financial institutions to financial agencies should be publicly disclosed.

    • 6.1.3 The regulations for the operation of organized financial markets (including those for issuers of traded financial instruments) should be publicly disclosed.

    • 6.1.4 Where financial agencies charge fees to financial institutions, the structure of such fees should be publicly disclosed.

    • 6.1.5 Where applicable, formal procedures for information sharing and consultation between financial agencies (including central banks), domestic and international, should be publicly disclosed.

    • 6.2 Significant changes in financial policies should be publicly announced and explained in a timely manner.

    • 6.3 Financial agencies should issue periodic public reports on how their overall policy objectives are being pursued.

    • 6.4 For proposed substantive technical changes to the structure of financial regulations, there should be a presumption in favor of public consultations, within an appropriate period.

    VII. Public Availability of Information on Financial Policies

    • 7.1 Financial agencies should issue a periodic public report on the major developments of the sector(s) of the financial system for which they carry designated responsibility.

    • 7.2 Financial agencies should seek to ensure that, consistent with confidentiality requirements, there is public reporting of aggregate data related to their jurisdictional responsibilities on a timely and regular basis.

    • 7.3 Where applicable, financial agencies should publicly disclose their balance sheets on a preannounced schedule and, after a predetermined interval, publicly disclose information on aggregate market transactions.

    • 7.3.1 Consistent with confidentiality and privacy of information on individual firms, aggregate information on emergency financial support by financial agencies should be publicly disclosed through an appropriate statement when such disclosure will not be disruptive to financial stability.

    • 7.4 Financial agencies should establish and maintain public information services.

    • 7.4.1 Financial agencies should have a publications program, including a periodic public report on their principal activities issued at least annually.

    • 7.4.2 Senior financial agency officials should be ready to explain their institution’s objective(s) and performance to the public, and have a presumption in favor of releasing the text of their statements to the public.

    • 7.5 Texts of regulations and any other generally applicable directives and guidelines issued by financial agencies should be readily available to the public.

    • 7.6 Where there are deposit insurance guarantees, policy-holder guarantees, and any other client asset protection schemes, information on the nature and form of such protections, on the operating procedures, on how the guarantee is financed, and on the performance of the arrangement, should be publicly disclosed.

    • 7.7 Where financial agencies oversee consumer protection arrangements (such as dispute settlement processes), information on such arrangements should be publicly disclosed.

    VIII. Accountability and Assurances of Integrity by Financial Agencies

    • 8.1 Officials of financial agencies should be available to appear before a designated public authority to report on the conduct of financial policies, explain the policy objective(s) of their institution, describe their performance in pursuing their objective(s), and, as appropriate, exchange views on the state of the financial system.

    • 8.2 Where applicable, financial agencies should publicly disclose audited financial statements of their operations on a preannounced schedule.

    • 8.2.1 Financial statements, if any, should be audited by an independent auditor. Information on accounting policies and any qualification to the statements should be an integral part of the publicly disclosed financial statements.

    • 8.2.2 Internal governance procedures necessary to ensure the integrity of operations, including internal audit arrangements, should be publicly disclosed.

    • 8.3 Where applicable, information on the operating expenses and revenues of financial agencies should be publicly disclosed annually.

    • 8.4 Standards for the conduct of personal financial affairs of officials and staff of financial agencies and rules to prevent exploitation of conflicts of interest, including any general fiduciary obligation, should be publicly disclosed.

    • 8.4.1 Information about legal protections for officials and staff of financial agencies in the conduct of their official duties should be publicly disclosed.

    Annex: Definitions of Certain Terms

    To facilitate presentation, certain general terms are used to capture different institutional arrangements in a summary fashion. The following descriptive definitions are used in the Code.

    Central Bank

    The institutional arrangements for assigning responsibility for the conduct of a country’s monetary policy differ among the Fund’s membership. For most Fund members, this responsibility is assigned to the central bank or to a system of constituent national central banks in a multinational central bank arrangement. There are a number of countries, however, where this role is designated to a “monetary authority” or to a “currency board.” To facilitate presentation, the term “central bank” in the Code refers to the institution responsible for conducting monetary policy, which may or may not be a central bank.

    Financial Agencies

    A wide range of institutional arrangements prevail among Fund members with regard to which unit of government carries exclusive or primary responsibility for the regulation, supervision, and oversight of the financial and payment systems. In a few countries, an agency has been established with responsibility for regulating and supervising an array of financial institutions (banking, insurance, and securities firms) and markets (securities, derivatives, and commodity futures). For most countries, the oversight responsibility for the financial sector is shared among several agencies. Thus, responsibility for the conduct of bank regulation and supervision or for bank deposit insurance policies in some countries is assigned to the central bank, or to an independent bank supervisory or deposit insurance agency, or split among several units of government. Similarly, responsibility for the conduct of policies related to the oversight of certain categories of financial institutions is assigned to the central bank or to a specialized agency. In some cases (e.g., payment systems) a public agency oversees the activities of private sector self-regulatory bodies. To facilitate presentation, the phrase “financial agencies” is used to refer to the institutional arrangements for the regulation, supervision, and oversight of the financial and payment systems, including markets and institutions, with the view to promoting financial stability, market efficiency, and client-asset and consumer protection. (Where the central bank carries responsibility for financial policies, some of the good transparency practices listed for financial agencies in Sections V-VIII of the Code are already specified in the transparency practices listed for central banks in Sections I-IV of the Code.)

    Financial Policies

    The term “financial policies” in the Code refers to policies related to the regulation, supervision, and oversight of the financial and payment systems, including markets and institutions, with the view to promoting financial stability, market efficiency, and client-asset and consumer protection.


    Unless a particular unit of government is specifically identified in the Code, reference to “government” in the Code refers either to the executive branch of government or to a particular ministry or public agency, depending on the issue at hand or the established tradition of government in particular countries.

    Annex: Interim Committee Attendance

    September 26, 1999


    Gordon Brown

    Managing Director

    Michel Camdessus

    Members or Alternates

    Ibrahim A. Al-Assaf, Minister of Finance and National Economy, Saudi Arabia

    Giuliano Amato, Minister of the Treasury, Budget, and Economic Planning, Italy

    Eddie George, Governor, Bank of England (Alternate for Gordon Brown, Chancellor of the Exchequer, United Kingdom)

    Antonio Casas González, President, Banco Central de Venezuela

    Peter Costello, Treasurer, Australia

    Dai Xianglong, Governor, People’s Bank of China

    Emile Doumba, Minister of Finance, Economy, Budget and Privatization, Gabon

    Hans Eichel, Minister of Finance, Germany

    Roque B. Fernández, Minister of Economy and Public Works and Services, Argentina

    Viktor Gerashchenko, Chairman, Central Bank of the Russian Federation

    Marianne Jelved, Minister of Economic Affairs, Denmark

    Abdelouahab Keramane, Governor, Banque d’Algérie

    Sultan Bin Nasser Al-Suwaidi, Governor, United Arab Emirates Central Bank (Alternate for Mohammed K. Khirbash, Minister of State for Finance and Industry, United Arab Emirates)

    Pedro Sampaio Malan, Minister of Finance, Brazil

    Trevor A. Manuel, Minister of Finance, South Africa

    Paul Martin, Minister of Finance, Canada

    Kiichi Miyazawa, Minister of Finance, Japan

    Didier Reynders, Minister of Finance, Belgium

    Syahril Sabirin, Governor, Bank Indonesia

    Yashwant Sinha, Minister of Finance, India

    Dominique Strauss-Kahn, Minister of Economy, Finance and Industry, France

    Lawrence H. Summers, Secretary of the Treasury, United States

    Kaspar Villiger, Minister of Finance, Switzerland

    Gerrit Zalm, Minister of Finance, Netherlands


    Yilmaz Akyuz, Chief, Macro-Economics and Development Policies Branch, UNCTAD

    Andrew D. Crockett, Chairman, Financial Stability Forum

    Willem F. Duisenberg, President, ECB

    Andre Icard, Assistant General Manager, BIS

    Donald J. Johnston, Secretary-General, OECD

    Ian Kinniburgh, Director, Development Policy Analysis Division, UN

    Michael Moore, Director-General, WTO

    Pedro Solbes Mira, Commissioner in charge of Economic and Monetary Affairs, European Commission

    Juan Somavia, Director-General, ILO

    Tarrin Nimmanahaeminda, Chairman, Joint Development Committee

    James D. Wolfensohn, President, World Bank

    International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund


    Inaugural Meeting, Washington, D.C., April 16, 2000

    1. The International Monetary and Financial Committee held its inaugural meeting in Washington, D.C. on April 16, 2000, under the Chairmanship of Mr. Gordon Brown, Chancellor of the Exchequer of the United Kingdom.

    Strengthening the IMF’s Role in the Global Economy

    2. The Committee’s deliberations have taken place today against the background of a growing public debate about the directions in which the IMF and the international financial system should evolve to adapt to a rapidly changing economic environment. The debate also reflects a concern that the benefits the world economy is deriving from freer trade and more integrated and deeper international capital markets are not reaching everyone, especially in the developing countries. The Committee reaffirms its strong support for the Fund’s unique role as the cornerstone of the international monetary and financial system and its ability, by virtue of its universal character, to help all of its members. With the support of all its members, the IMF has undergone continuous change to equip itself better to assist members to build the strong macroeconomic and institutional underpinnings required for international financial stability and the broader sharing of the benefits and opportunities of an open world economy. But more needs to be done, and the Committee therefore pledges to continue to work toward making the IMF more effective, transparent, and accountable.

    World Economic Outlook

    3. The Committee welcomes the rapid recovery of the world economy in 1999 and the prospect of even stronger growth in 2000. Global economic and financial conditions have improved markedly during the past year, with growth picking up in most regions of the world. Moreover, the acceleration of global growth has occurred without a significant increase in underlying inflation. This improvement has, in most instances, also reflected the pursuit of sound macro-economic policies and continuing structural reforms in many countries, both advanced and developing. In particular, the Committee notes that:

    • the expansion in the United States continues at a remarkable pace. Monetary and fiscal policies will need to remain prudent, and fiscalsurplus policies should not be relaxed. National saving also needs to increase further;

    • growth has also strengthened in western Europe and it is important that this is sustained. Monetary policy should remain supportive of growth through its focus on maintaining low inflation. Countries should also continue to pursue prudent fiscal policies. Stronger growth provides an opportunity to press ahead with fiscal reforms necessary to ensure the long-term sustainability of public finances, and to continue with further reforms of labor, capital, and product markets to ensure that the pace of growth is sustained; and

    • there are some positive signs in Japan. However, a durable economic recovery has yet to be secured and deflationary concerns still remain. It is important that macroeconomic policies continue to be supportive until recovery in private demand is firmly established; structural reforms, especially through sustained financial and corporate sector restructuring, will be crucial in boosting confidence and paving the way for a return to sustained growth.

    4. While welcoming the increases in oil production that will help stabilize oil prices and support continuing non-inflationary growth in global output, the Committee notes that the current outlook is still vulnerable in several respects. In particular, substantial differences in economic performance continue to contribute to external imbalances. Against this background, the Committee stresses the importance of the policy priorities outlined above, which would help to promote a smooth transition toward a more sustainable and balanced pattern of economic growth.

    5. The Committee notes that the strong performance in North America and the increase in growth in western Europe have provided a more supportive environment for growth elsewhere in the world:

    • in Asia, China and India have continued to grow rapidly; and economic recovery in the crisis-affected countries has gained significant momentum. In most countries, macro-economic policies should still be directed toward providing support for recovery. However, in the countries where recovery is most advanced, policies should turn to strengthening the conditions for sustainable growth. The Committee urges all countries to maintain the momentum behind their structural reform efforts;

    • in Latin America, the downturn in 1999 was generally milder than initially foreseen, and signs of a broad-based recovery are already evident in the context of further declines in inflation. However, further fiscal consolidation remains a priority, especially in those cases where external financing requirements remain large;

    • Russia’s economic performance has improved, with economic growth attributable in part to higher oil prices and the 1998 devaluation, as well as macroeconomic policies. Growth in Russia will be sustained only if major strides are made to strengthen institutions, especially the rule of law, and to create an attractive environment for domestic and foreign investors, thus tackling the issue of capital flight. Economic conditions are also strengthening in other transition economies; and

    • the recent recovery in oil prices and in some other commodity markets are providing support to many countries’ own efforts in the Middle East and Africa. These countries have an opportunity to accelerate economic reforms and diversification. Other countries have performed less well for a variety of reasons, including inappropriate policies, unfavorable weather conditions, or continued conflict. The Committee encourages these countries to strengthen their adjustment efforts with the help of the international community.

    6. The Committee reiterates the critical importance of open and competitive markets as a key component of efforts to sustain growth and stability in the global economy and to reduce poverty. Improving access to industrial country markets for products of developing countries will be crucial to support their reform efforts. The Committee welcomes the initiation of WTO negotiations in agriculture and services, and supports the early launch of a new round of multilateral trade negotiations, which would bring benefits to all countries, including the poorest. The Committee calls on the IMF to continue to work with the World Bank, the WTO, and other interested parties to improve the effectiveness of trade-related technical assistance and to build institutional capacity. It encourages the Fund to give appropriate emphasis to trade policy reforms in its policy advice to all its members, including under Fund-supported programs, and in country poverty reduction strategies.

    Review of Fund Facilities

    7. The Committee agrees that the Fund’s financial operations should continue to adapt to the changing nature of the global economy, including the rapid growth and integration of international capital markets. Against this background, the Committee welcomes the progress that has been made in reviewing the Fund’s non-concessional facilities. It endorses the Board’s decision to simplify the array of IMF facilities by eliminating four facilities—the Currency Stabilization Fund, support for commercial bank Debt and Debt Service Reduction, the Buffer Stock Financing Facility, and the contingency element of the Compensatory and Contingency Financing Facility—and by streamlining the Compensatory Financing Facility.

    8. The Committee has set out a number of principles that should underpin this review, including the need to preserve the Fund’s ability to provide and catalyze financial support to all member countries according to individual country circumstances, and with due consideration of social implications. The Fund’s facilities should encourage countries to adopt strong ex ante measures to prevent crises, including, where appropriate, observance of internationally agreed codes and standards, and the maintenance of good relations with private creditors. The Fund must retain the ability to help countries respond quickly and effectively to short-run balance of payments problems. In defined circumstances where balance of payments difficulties are expected to be of a long-term nature, the Fund will also need to be able to support reforms that deal with structural problems, while encouraging countries to move toward sustainable access to, and reliance on, private capital. The Fund must also be able to respond rapidly and on an appropriate scale to crises of capital market confidence, and it should do so on terms that mitigate moral hazard and encourage rapid repayment. In this context, the IMF should take appropriate steps to involve the private sector in forestalling and resolving crises.

    9. With these principles in mind, the Committee asks the Executive Board to continue its review of these issues and, in particular, to consider the policies on the maturity, pricing structure, and other aspects of existing facilities, with a view to ensuring that they provide the right incentives, in particular by enhancing the effectiveness of the CCL, without compromising the initial eligibility criteria, and by avoiding unduly prolonged use of resources provided under the SBA and EFF. The Committee asks the Executive Board to secure rapid progress and to report at the Committee’s next meeting.

    Safeguards and Misreporting

    10. The Committee affirms that, while episodes of misre-porting of information to the Fund or allegations of misuse of Fund resources have been few, such incidents are nonetheless extremely serious and undermine the trust that binds the Fund and its members, as well as public confidence in the Fund. The Committee therefore welcomes the Board’s adoption of a strengthened framework of measures to safeguard the use of Fund resources, pursuant to the Interim Committee’s call in September 1999, and to deter misreporting and misuse of Fund resources. The Committee stresses that the forceful application of the strengthened framework is critical to enhancing the integrity of the Fund’s financial operations.

    11. The Committee especially welcomes the Board’s decision to adopt the new framework for the conduct of safeguards assessments. It also welcomes the requirement that all countries making use of Fund resources will publish annual central bank financial statements that are independently audited in accordance with internationally accepted standards. The Committee also welcomes the decisions to broaden the application of tools for addressing misreporting when it comes to light, including by applying the Guidelines on Mis-reporting to prior actions and other essential information, lengthening the two-year limitation period, and making public the relevant information in cases of misreporting, in line with the Board’s decision. It agrees that the effectiveness of this policy be reviewed after 12 to 18 months.

    Private Sector Involvement

    12. The Committee underscores the importance of prevention as the first line of defense against crises. Countries participating in international capital markets and their private creditors should seek, in normal times, to establish a strong, continuous dialogue. Collective action clauses could have an important role to play in facilitating orderly crisis resolution.

    13. The IMF has an important role to play with regard to crisis resolution. The Committee agrees that the approach adopted by the international community should provide for flexibility to address diverse cases within a framework of principles and tools, and be based on the IMF’s assessment of a country’s underlying payment capacity and prospects of regaining market access.

    14. In some cases, the combination of catalytic official financing and policy adjustment should allow the country to regain full market access quickly. In some cases, emphasis should be placed on encouraging voluntary approaches, as needed, to overcome creditor coordination problems. In other cases, the early restoration of full market access on terms consistent with medium-term external sustainability may be judged to be unrealistic, and a broader spectrum of actions by private creditors, including comprehensive debt restructuring, may be warranted to provide for an adequately financed program and a viable medium-term payments profile.

    15. In those cases where debt restructuring or debt reduction may be necessary, the Committee agrees that IMF-supported programs should put strong emphasis on medium-term sustainability and should strike an appropriate balance between the contributions of the private external creditors and the official external creditors, in light of financing provided by international financial institutions. The Committee notes the need to aim for fairness in the treatment of different classes of private creditors, and that private sector involvement should proceed on the basis that no class of creditors should be considered inherently privileged. The IMF should review the country’s efforts to secure needed contributions from private creditors in light of these considerations, as well as medium-term sustainability. The responsibility for negotiation with creditors is placed squarely with debtor countries. The international financial community should not micromanage the details of any debt restructuring or debt reduction negotiation.

    16. The Committee agrees that the IMF should consider whether private sector involvement is appropriate in programs supported by the Fund. In this regard, the Committee also agrees on the need to provide greater clarity to countries about the terms and conditions of their programs. When all relevant decisions have been taken, the Fund should set out publicly how and what policy approaches have been adopted.

    Review of Surveillance; Links between Surveillance and Standards and Codes

    17. The Committee welcomes the recent internal review of Fund surveillance, which built upon the June 1999 external evaluation. Progress is being made in adapting surveillance to changing global realities and to strengthening it in key areas, including financial sector issues, and external debt and capital account developments. The Committee also welcomes the sharper focus on exchange rate policies, and their consistency with underlying macroeconomic and other policies, and institutional arrangements. Issues outside the traditional core areas of surveillance should generally be considered when they are likely to have a significant impact on macroeconomic and financial stability. The Committee urges that the Fund improve further its multilateral surveil-lance by taking account of international implications of national policies. The Committee notes the importance of the provision of comprehensive, timely, high quality, and accurate information to the Fund in line with the SDDS and GDDS, and calls upon the Fund to help and encourage members in adopting and meeting these standards.

    18. The Committee agrees that the Fund’s focus on financial vulnerabilities must be strengthened further, and supports vulnerability analyses in IMF surveillance. To this end, the Committee: (i) encourages the further development and integration of indicators of country financial vulnerability in the IMF’s ongoing surveillance and operational work; (ii) calls on the IMF, in collaboration with the World Bank, to complete promptly guidelines on sovereign debt management; and (iii) asks the Board to work further on how to incorporate into surveillance and technical assistance the work under way on the policy on official reserves.

    19. The Committee welcomes the work of the Fund and the Bank in preparing Reports on the Observance of Standards and Codes (ROSCs) and in implementing the pilot Financial Sector Assessment Program (FSAP) that could serve as the primary basis for enhancing the Fund’s monitoring of the financial sector in the context of Article IV surveillance through Financial System Stability Assessments (FSSAs). It endorses the decision to continue the FSAP and expand the coverage to 24 countries on a voluntary basis for the coming year. The Committee looks forward to a report on the progress with these programs at its next meeting.

    20. The Committee recognizes the importance of adherence to international standards and codes of good practice in improving the policy environment and in reducing countries’ macroeconomic and financial vulnerability. It reaffirms that the adherence to such codes is voluntary. The Committee agrees that the Article IV surveillance process provides the appropriate framework within which to organize and discuss with national authorities the implications of assessments of adherence to standards and codes, and calls upon the Executive Board to agree on the modalities. The Committee also recognizes the possible need for technical assistance to help meet relevant standards. Fund surveillance will be the principal mechanism through which the results of many initiatives under way in the IMF and elsewhere to strengthen the international monetary system will come together, including in the areas of standards and codes, financial system assessments, data provision, and transparency. This will pose new challenges for the Fund, especially on how to draw on the work and special expertise of other institutions in its surveillance. In this regard, the Committee welcomes the work that has been done by the Fund—in collaboration with the World Bank and other relevant bodies—to encourage the adoption of standards and codes. It looks forward to the results of the pilot exercise on the preparation of ROSCs, and encourages the publication of ROSCs on a voluntary basis. The Committee encourages the Executive Board to continue its work on how to incorporate into surveillance the results of these various initiatives, and looks forward to a review of progress at its next meeting.

    21. The Committee welcomes the progress made in the Fund and other fora in developing and strengthening standards and codes for data dissemination; for transparency in fiscal, monetary, and financial policies; for banking supervision; and for securities and insurance regulation. It urges the Fund to continue with this work, including through outreach activities, and with the provision of technical assistance.

    22. The Committee takes note of the reports of the Financial Stability Forum (FSF) Working Groups on highly leveraged institutions, offshore financial centers, and capital flows, and the report on standards and codes. It welcomes the work done by the FSF, and requests the Executive Board to undertake an assessment of the recommendations relevant to the Fund.

    Transparency and Accountability

    23. The Committee reiterates the importance it attaches to greater transparency in policy making in improving the functioning of national economies as well as the international financial system. It also underscores the importance of enhanced transparency and accountability of the international financial institutions themselves. In this regard, the Committee welcomes continuing progress in a number of areas:

    • the widespread release—currently in 80 percent of cases—of Public Information Notices following Article IV consultations and of letters of intent and other program documents underpinning Fund financial programs; and the issuance of Chairman’s statements following Executive Board discussions of use of Fund resources;

    • the voluntary participation of 60 countries (compared with the initial target of 20) in the pilot project for the release of Article IV staff reports;

    • the expanded publication of information on the Fund’s liquidity position, members’ accounts with the Fund, and the Fund’s quarterly financial transactions plan;

    • the systematic publication of policy documents in a wide range of areas to encourage public comment and discussion;

    • the publication, under the pilot study for the preparation of ROSCs, of modules for 11 countries, and the modules for an additional 20 countries now under preparation; and

    • the publication of the Executive Board’s Work Program.

    24. The Committee encourages further actions to make the policies of the Fund, and members’ policies, more transparent without compromising the Fund’s role as confidential advisor.

    25. The Committee welcomes the decision by the Fund to establish an independent evaluation office, which will complement the Fund’s ongoing internal audit and self-evaluation activities. It urges the Executive Board to agree on the terms of reference, structure, staffing, and operating procedures, and to report back to the Committee at its next meeting. The Committee looks forward to regular reports on the activities of the office to future IMFC meetings.

    The HIPC Initiative and Poverty Reduction and Growth Strategies

    26. The Committee notes the recent progress in implementing the enhanced HIPC Initiative, which is aimed at providing faster, deeper, and broader debt relief and strengthening the link between debt relief and poverty reduction. It urges all those with a stake in the HIPC Initiative to work for faster and effective implementation, and to give the HIPC process the highest priority so that as many countries as possible can reach the decision point by the end of the year. The Committee welcomes the establishment of a Bank/Fund Joint Implementation Committee to facilitate implementation of the HIPC Initiative and the poverty reduction strategy process. In this connection, it welcomes the decision to provide regular reports on progress in country cases to the two Executive Boards.

    27. The Committee welcomes the progress made in developing country-owned poverty reduction strategies as the framework for Fund and World Bank concessional lending and for linking debt relief under the enhanced HIPC Initiative to concrete poverty reduction programs and growth strategies, so as to ensure that the resources freed are directed to key poverty reduction measures. The Committee urges all countries involved to move ahead as quickly as possible with the preparation of Poverty Reduction Strategy Papers (PRSPs) in a participatory manner, integrating priority measures for poverty reduction and structural reforms within a growth-oriented macroeconomic framework.

    28. The Committee reiterates that macroeconomic stability, transparent management of public resources, and good governance are essential for achieving sustainable growth and poverty reduction. The Fund has a critical role to play in helping countries adopt and implement appropriate macro-economic policies. The Committee welcomes the clear delineation of the cooperative but distinct roles of the Fund and Bank, and notes that the Fund will rely on the Bank to lead in helping countries to develop policies to combat poverty and improve social conditions.

    29. The Committee reaffirms the importance of the principle of full participation in the HIPC Initiative by all creditors. In this respect, it calls on all bilateral creditors to play their part, while recognizing the need for flexibility in exceptional cases. It stresses that debt relief can be effective only if it complements and reinforces sound policies implemented by HIPC countries and leads to an increase in resource flows. It welcomes the decisions adopted by the Executive Board, and the actions taken by many members, to ensure the financing for the Fund’s participation in the HIPC Initiative and for the Poverty Reduction and Growth Facility (PRGF). It encourages all members and multilateral institutions to complete this process as soon as possible.

    Tribute to Michel Camdessus

    30. The members of the Committee unanimously pay tribute to Mr. Michel Camdessus for the vision, skill, and energy with which he led the International Monetary Fund as Managing Director through 13 years of unprecedented challenges. Over this period, international monetary and financial cooperation was tested by the growing openness of the world economy; the rapid spread of market economy principles throughout much of the world; financial crises of unexpected virulence and scope; and the growing danger of marginalization of the poorest economies. Under his leadership, the IMF moved on many fronts—strengthening surveillance; launching greater openness and transparency; and introducing innovative financial facilities to help resolve the debt crisis of the 1980s and the financial crises of the 1990s, and, through the establishment of the Enhanced Structural Adjustment Facility (now the Poverty Reduction and Growth Facility), to support and sustain the integration of the Fund’s low-income members into the world economy. The members of the Committee wish to record their deep appreciation of Mr. Camdessus’ many contributions, which were always marked by his personal enthusiasm and optimism, and his characteristic blend of commitment to financial discipline with devotion to alleviating the hardships of the most vulnerable.

    31. The Committee warmly welcomes the appointment of Mr. Horst Köhler as the new Managing Director, and expresses its deep gratitude to Mr. Stanley Fischer for his stewardship of the Fund in the interim.

    32. The next meeting of the IMFC will be held in Prague on September 24, 2000.

    Annex: International Monetary and Financial Committee Attendance April 16, 2000


    Gordon Brown

    Acting Managing Director

    Stanley Fischer

    Members or Alternates

    Hamad Al-Sayari, Governor, Saudi Arabian Monetary Agency (Alternate for Ibrahim A. Al-Assaf, Minister of Finance and National Economy, Saudi Arabia)

    Giuliano Amato, Minister of the Treasury, Budget and Economic Planning, Italy

    Eddie George, Governor, Bank of England (Alternate for Gordon Brown, Chancellor of the Exchequer, United Kingdom)

    Rod Kemp, Assistant Treasurer, Australia (Alternate for Peter Costello, Treasurer, Australia)

    Xiao Gang, Deputy Governor, People’s Bank of China (Alternate for Dai Xianglong, Governor, People’s Bank of China)

    Cristóbal Montoro, Secretary of State for Economy, Spain (Alternate for Rodrigo de Rato Figaredo, Second-Vice President and Minister of Economy and Finance, Spain)

    N’Golo Coulibaly, Minister of Economy and Finance, Côte d’Ivoire (Alternate for Emile Doumba, Minister of Finance, Economy, Budget and Privatization, Gabon)

    Hans Eichel, Federal Minister of Finance, Germany

    Laurent Fabius, Minister of Economy, Finance and Industry, France

    Viktor Gerashchenko, Chairman, Central Bank of the Russian Federation

    Abdelouahab Keramane, Governor, Banque d’Algérie

    Mohammed K. Khirbash, Minister of State for Finance and Industry, United Arab Emirates

    José Luis Machinea, Minister of Economy, Argentina

    Pedro Sampaio Malan, Minister of Finance, Brazil

    Trevor A. Manuel, Minister of Finance, South Africa

    Gordon Thiessen, Governor, Bank of Canada (Alternate for Paul Martin, Minister of Finance, Canada)

    Masaru Hayami, Governor, Bank of Japan (Alternate for Kiichi Miyazawa, Minister of Finance, Japan)

    Sauli Niinistö, Minister of Finance, Finland

    Didier Reynders, Minister of Finance, Belgium

    Yashwant Sinha, Minister of Finance, India

    Lawrence H. Summers, Secretary of the Treasury, United States

    Kaspar Villiger, Minister of Finance, Switzerland

    A.H.E.M. Wellink, President, De Nederlandsche Bank (Alternate for Gerrit Zalm, Minister of Finance, Netherlands)

    Mrs. Zeti Akhtar Aziz, Deputy Governor, Bank Negara Malaysia


    Yilmaz Akyuz, Chief, Macro-Economics and Development Policies, UNCTAD

    Andrew D. Crockett, Chairman, FSF

    Willem F. Duisenberg, President, ECB

    André Icard, Assistant General Manager, BIS

    Donald J. Johnston, Secretary-General, OECD

    Ian Kinniburgh, Director, Development Policy Analysis Division, UN

    Eddy Lee, Director, International Policy Group, ILO

    Michael Moore, Director-General, WTO

    Pedro Solbes Mira, Commissioner in charge of Economic and Monetary Affairs, European Commission

    James D. Wolfensohn, President, World Bank

    Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries (Development Committee)


    Sixtieth Meeting, Washington, D.C., September 27, 1999

    1. The sixtieth meeting of the Development Committee was held in Washington, D.C., on September 27, 1999 under the chairmanship of Mr. Tarrin Nimmanahaeminda, Minister of Finance of Thailand.

    2. Heavily Indebted Poor Countries Debt Initiative (HIPC) and Enhanced Poverty Focus of IDA and ESAF Supported Programs. Ministers expressed their appreciation to the Bank and the Fund for the transparent and participatory manner in which they conducted the 1999 HIPC Initiative review. They welcomed the important role played by civil society in the development of proposals designed to make the debt relief under the HIPC Initiative deeper, broader and faster.

    3. Ministers endorsed—subject to the availability of funding—the enhancements to the HIPC Initiative framework for countries pursuing sound policies and committed to reform. In this context, they expressed support for: (i) a lowering of the debt sustainability thresholds to provide a greater safety cushion and increased prospects for a permanent exit from unsustainable debt; (ii) the provision of faster debt relief through interim assistance; (iii) the introduction of floating completion points that would shift the focus of assessment toward positive achievements and outcomes rather than the length of track record; and (iv) the resulting increase in the number of countries expected to be eligible for debt relief.

    4. Ministers also endorsed the proposed framework for strengthening the link between debt relief and poverty reduction, while recognizing that debt relief alone would be insufficient to achieve this goal. In this context, they welcomed the proposed Poverty Reduction Strategy Papers, to be prepared by national authorities in close collaboration with Bank and Fund staff. They stressed that the Poverty Paper should be in place by the decision point; they recognized, however, that on a transitional basis the decision point could be reached without agreement on a Poverty Paper, but in all cases demonstrable progress in implementing a poverty reduction strategy would be required by the completion point.

    5. Ministers also welcomed and endorsed the proposals developed by the Bank and Fund to extend the same approach to enhance the poverty focus of all IDA and ESAF supported programs, and to strengthen collaboration between the two institutions. The Committee emphasized that the strategies set out in the new Poverty Papers should be country-driven, be developed transparently with broad participation of elected institutions, stakeholders including civil society, key donors and regional development banks, and have a clear link with the agreed international development goals—principles that are embedded in the Comprehensive Development Framework. They stressed in particular the need to develop macroeconomic, structural and social policies that will contribute to long-term poverty reduction, and the need to develop measurable intermediate and outcome indicators to monitor progress. Ministers stressed the crucial role good governance plays in HIPC implementation in establishing a framework that discourages corruption and provides more effective monitoring and quality control over fiscal expenditures. Ministers called on the Bank and Fund, in accordance with their respective mandates and expertise, to give all possible assistance to countries in bringing together the necessary social, structural and macroeconomic policies required in developing poverty reduction strategies, recognizing the countries’ capacity constraints. The Poverty Papers would provide the basis for all IDA and Fund lending to low-income countries. Ministers also encouraged regional development banks and donors to use the Poverty Papers to guide their support.

    6. Ministers welcomed the proposed reform of the ESAF aimed at giving greater prominence to the goal of supporting countries’ poverty reduction efforts and the proposed renaming of the facility as the Poverty Reduction and Growth Facility. Recognizing that the new approach will involve substantial changes in Bank and Fund operations to combat poverty, and the need to tailor the approach to individual country circumstances and to learn quickly from experience in early cases, the Committee strongly welcomed the commitments of the President and Managing Director to its effective implementation. Ministers looked forward to receiving reports on progress achieved.

    7. Ministers reaffirmed the importance of implementing the enhanced HIPC Initiative framework in accordance with the principles that have guided the Initiative since its inception, including (i) additionality of debt relief (ii) the maintenance of the financial integrity of multilateral financial institutions, and (iii) the importance of burden sharing on a fair and equitable basis, including of the costs to multilateral institutions. They agreed financing of debt relief should not compromise the financing made available through concessional windows such as IDA. Ministers expressed appreciation for the many contributions to the HIPC Initiative made thus far, and for the efforts made by multilateral development institutions to provide funding for the Initiative from their own resources. Ministers recognized that most of these institutions will need bilateral support on an urgent basis in order to meet the additional costs resulting from the proposed enhanced framework and to enable them to implement the Initiative rapidly. The Committee welcomes the agreement on the financing of the IMF’s participation in the HIPC Initiative and continued concessional lending by the IMF for growth and poverty reduction in low income member countries.

    8. Ministers also welcomed agreement on the elements of a financing plan for multilateral development banks that respect the above principles. This will permit the Enhanced. HIPC Framework to be launched and the delivery of debt relief to begin for those countries requiring retroactive relief and those expected to reach their decision points over the near term. They asked the World Bank to work actively and closely with the whole group of donors and other MDBs to ensure that financing is mobilized to fully fund HIPC debt relief over the longer term.

    9. Ministers also welcomed the agreement by the Paris Club to increase its debt relief under the enhanced framework by providing increased debt reduction in NPV terms up to 90 percent or more, if needed, on commercial loans as well as additional relief on ODA claims—up to full cancellation—on a bilateral basis.

    10. Ministers welcomed the continuing progress in the implementation of the Initiative, noting that to-date 14 countries have been considered under the Initiative—with four brought to their completion points. The Committee urged the speedy implementation of the enhanced Initiative so that as many countries as possible qualify for assistance under the Initiative by end 2000.

    11. IBRD Capital Adequacy. Ministers reviewed a report from the World Bank that reflected ongoing discussions by the Bank’s Executive Board and management on options to maintain and support the IBRD’s financial capacity. The Committee agreed with the report’s finding that the Bank’s finances remain sound. Ministers also recognized that the Bank’s financial capacity may limit its ability to respond to future demands, especially when there was a deterioration in the global financial environment. Ministers requested management and the Executive Board to continue their examination of the level of financial capacity needed to preserve the IBRD’s financial integrity while permitting it to help meet, within its mandate, the development needs of borrowing member countries. Ministers requested that the Bank report regularly to the Committee on these issues.

    12. Developing and Transition Countries and the International Trade Agenda. The Committee noted that effective development and trade policy have become increasingly intertwined. They emphasized the importance of trade to development, poverty alleviation and sustained global economic recovery. Ministers also emphasized that the next round of trade negotiations needed to deliver early and substantial benefits for developing and transition countries, in particular for the least developed countries. This would require improved market access and further reducing barriers to trade. They stressed that if developing and transition countries are to use the international trading system effectively to promote growth and reduce poverty they will need to become active partners in the next round of trade negotiations. Ministers welcomed the commitment of the new Director-General of the World Trade Organization (WTO), Mr. Mike Moore, to achieve this goal and urged the World Bank, the Fund, WTO, UNCTAD and other agencies to help developing and transition countries build their capacity to participate in further rounds of negotiations. The Committee called on the World Bank, IMF and WTO to cooperate with other parties in developing effective programs of capacity building for trade, including through the Integrated Framework for Trade Related Technical Assistance for the Least Developed Countries. The Bank, in particular, could provide financial and technical support to improve trade-related infrastructure and institutions, helping to build capacity in domestic institutions involved in trade policy and negotiations, and undertaking research on trade barriers to developing countries’ exports.

    13. World Bank Support for Strengthening International Financial Architecture. Ministers welcomed the role the World Bank Group is playing to help strengthen the global financial architecture to reduce the risk and severity of financial crises, and to reduce the vulnerability of developing countries to crises when they occur. The Committee stressed that at the country level the Bank’s primary focus, given the objective of preventing crises, should be on assisting developing countries to strengthen their domestic financial markets and their integration with the global financial system. This should be done through helping countries overcome structural and social sources of vulnerability and build the needed policy and institutional capacity. Given the breadth and complexity of the agenda, Ministers encouraged the Bank and the Fund to focus on their areas of comparative strength while developing partnerships with other international institutions. Ministers welcomed progress in the joint Bank/Fund program of financial sector assessments and the Bank’s program of Social and Structural Reviews. They also welcomed the proposed enhanced collaboration with the IMF in assisting interested countries to assess their progress in implementing a range of international norms and good practices, with due consideration to differing country conditions. The Committee encouraged the Bank to continue to bring developing country experience and perspectives to the international debate. In this context, they noted the establishment of a global forum on corporate governance, launched in collaboration with the OECD, and the Bank’s supportive role for work on insolvency, accounting and auditing.

    14. Ministers welcomed the Bank’s help to developing countries on social issues, as well as its report on managing the social dimensions of crises and good practices in social policies. They encouraged the Bank to continue to develop this work and draw on it in supporting countries’ poverty reduction efforts. The Bank should accumulate and disseminate knowledge of good practices to help guide countries seeking to create institutions and implement policies that will forestall and mitigate the social costs of economic shocks and protect the most vulnerable.

    15. Ministers welcomed the steps being taken to strengthen the work of the Development and Interim Committees, both to better reflect the enhanced level of cooperation between the Bank and the Fund and to reduce duplication in the committees’ agendas. They encouraged the Bank and Fund to continue to review experience in this area.

    16. Next Meeting. The Committee’s next meeting is scheduled for April 17, 2000 in Washington, D.C.

    Sixty-First Meeting, Washington, D.C., April 17, 2000

    1. The sixty-first meeting of the Development Committee was held in Washington, D.C., on April 17, 2000 under the chairmanship of Mr. Tarrin Nimmanahaeminda, Minister of Finance of Thailand. The Committee’s deliberations took place against the background of growing public debate about the appropriate roles of international institutions at a time when governments and people throughout the world confront the opportunities and rapid changes brought about by globalization. In their discussions of how to strengthen efforts to reduce poverty, to intensify the attack on HIV/AIDS, and to expand the benefits of trade to all countries, Ministers emphasized the importance they attach to preserving and further strengthening the family of multilateral institutions as a powerful force for global progress, equity and stability.

    2. Intensifying Action Against HIV/AIDS. Ministers emphasized that the HIV/AIDS epidemic, which has already infected about 50 million people, is not only a very serious public health concern and the cause of great human suffering, but a severe danger to development progress itself. Ministers recognized that HIV/AIDS weakens economic growth, governance, human capital, labor productivity, and the investment climate, thereby undermining the foundations of development and poverty reduction. Ministers noted that the epidemic now poses not only an acute danger to development in Sub-Saharan Africa, but is a rapidly growing threat in Asia and the Caribbean, and a probable threat in many Eastern European countries and elsewhere as well. As HIV spreads quickly, even countries with currently low infection rates cannot afford to delay strengthening anti-HIV/AIDS programs.

    3. In view of this alarming situation, the Committee called for rapid intensification of international action on the global HIV/AIDS crisis. Given the urgency of prevention and the vast needs for care and treatment, the Committee stressed the importance of effective partnerships to encourage each actor in the international system to focus on its comparative strength. Ministers urged governments, international agencies, civil society, the media and the private sector, including the pharmaceutical industry, to step up their efforts, building on experience gained in on-going activities. They urged developing and transition countries to increase their political and economic commitment to combating HIV/AIDS, to address the epidemic on a multisectoral basis, to scale up programs to nationwide—and in some cases regional—scope, to strengthen the primary health care systems needed for effective delivery of services, and to provide more resources directly to local communities. The Committee encouraged industrialized countries and international organizations to mainstream HIV/AIDS in their development programs and to devote increased financial and institutional resources on a scale commensurate with the scope of the crisis. Ministers recognized that support for capacity building is particularly important in addressing this long-lasting development problem.

    4. Ministers welcomed the World Bank’s expanded efforts against HIV/AIDS, in particular its active participation in the UNAIDS partnership, its new HIV/AIDS strategy for Africa, and its work with the Global Alliance for Vaccines and Immunizations (GAVI). They urged the Bank to intensify its HIV/AIDS work on a global basis, focusing on its areas of expertise, and called on the Bank and the Fund to take full account of HIV/AIDS in their support for poverty reduction strategies and the HIPC Initiative.

    5. Trade, Development and Poverty Reduction: Ministers emphasized the critical importance of trade for development and poverty reduction. They noted that accelerated and sustainable growth is a necessary condition for reducing poverty, and that more open economies tend to grow faster than closed ones; evidence suggests that substantial benefits could be gained from further liberalization of trade regimes in both developed and developing (including transition) countries. Ministers recognized that developed countries have much to do to improve market access for developing countries’ exports (e.g. agriculture, textiles). Developing countries need to implement appropriately sequenced outward-oriented reforms that will permit trade expansion to promote development and poverty reduction. Ministers noted that the majority of the poorest countries lag behind in their integration into the world trading system. Additional domestic and international reforms are needed, including special consideration of enhanced market access for these countries (e.g. by extending comprehensive and predictable duty- and quota-free market access). Ministers also noted the potential of regional integration to help developing countries increase their share in global markets. Ministers strongly endorsed a timely initiation of WTO multilateral trade negotiations that address, inter alia, issues of most concern to developing countries.

    6. Ministers emphasized that countries should ensure that their efforts to expand trade are integrated into a comprehensive framework for development that includes the necessary complementary reforms and investment in institutions, infrastructure and social programs. Ministers endorsed the commitment of the World Bank and the IMF to use their programs to support these efforts, which are increasingly reflected in countries’ poverty reduction strategies. Ministers reiterated their call on the Bank, the Fund and WTO to cooperate with other parties in developing effective programs of capacity building for trade, including through an improved Integrated Framework for Trade Related Assistance for the Least Developed Countries. The Committee urged the Bank to mainstream trade in its country assistance programs by providing greater financial and technical support to improve trade-related infrastructure and institutions, including building domestic capacity for trade policy and negotiations, and by undertaking a strengthened research program on, inter alia, trade barriers to developing country exports, the issues developing countries face in implementing the Uruguay Round Agreement and the complex links between trade and poverty.

    7. Heavily Indebted Poor Countries Debt Initiative (HIPC): Ministers noted the progress made in implementing the enhanced HIPC framework endorsed by the Committee at its last meeting. Five countries—Bolivia, Mauritania, Mozambique, Tanzania and Uganda—have thus far reached their decision points under this new framework, bringing total committed debt relief under the HIPC Initiative to more than $14 billion; moreover, up to fifteen additional country cases could be considered by the Bank and Fund Executive Boards this year. Ministers encouraged the governments of HIPC-eligible countries to continue to work closely with the Bank and Fund and other partners in pursuing sound policies and delivering effective reform programs so that the delivery of HIPC debt relief, and the related poverty reduction strategies, can move forward as swiftly as possible. The Committee welcomed the establishment by the Bank and the Fund of a joint implementation committee (JIC) to facilitate effective implementation of the enhanced HIPC Initiative and the new poverty reduction strategy approach.

    8. Ministers appreciated that participation in the enhanced framework had now been approved by the governing bodies of a majority of multilateral institutions, although they recognized that successful implementation of the Initiative will depend upon the timely availability of adequate financing to meet their full debt relief costs. While these institutions were encouraged to utilize their own resources for this purpose to the greatest extent possible, Ministers recognized that many multilateral institutions needed additional bilateral support on an urgent basis. Ministers welcomed donor pledges and commitments of resources, including those announced since September, and urged that these pledges be turned into actual commitments as soon as possible. They also recognized that even with these pledges, the Initiative remains under-funded. Donors that had not yet done so were urged to make generous contributions to the HIPC Trust Fund. Ministers reiterated the need to ensure that debt relief does not compromise the financing from concessional facilities such as IDA. Ministers also reiterated the importance of the principle that all bilateral creditors should participate fully in the provision of relief under the enhanced Initiative, while recognizing the need for flexibility in exceptional cases.

    9. Poverty Reduction Strategies: Ministers welcomed progress in implementation of the Poverty Reduction Strategy approach. The Committee had endorsed this approach at its last meeting as a means to strengthen the link between debt relief, and external assistance more generally, and poverty reduction, and to enhance the poverty focus of all Bank and Fund concessional lending. Ministers noted that many governments in low-income countries had begun to develop, through transparent and participatory processes, country-owned, comprehensive strategies that addressed key issues in tackling poverty, such as equitable growth, governance and corruption, and institution and capacity building. Ministers welcomed the steps taken by governments to develop and implement interim strategies that permit HIPC debt relief and concessional lending to be provided while governments prepare more comprehensive poverty reduction strategies.

    10. Recognizing that this approach involves new ways of assisting low-income countries, Ministers urged the Fund and Bank to allocate adequate resources to support the PRSP process. The institutions were urged to continue to work collaborativcly with member countries and other development partners to develop full poverty reduction strategies, integrated with macroeconomic and fiscal policies. These strategies should incorporate lessons learned as implementation proceeds, including concentration on a limited number of clear, realistic and measurable performance targets and including those related to the International Development Goals. As poverty reduction strategies need to be mainstreamed, Ministers emphasized they should be fully integrated into countries’ budget cycles. They also emphasized the importance of increased efforts, including both technical assistance and funding, to improve statistics and other data and the analytical skills at the country level needed to make the approach a success. Moreover, they encouraged bilateral and multilateral agencies to support governments in the preparation of their strategies. These agencies were also encouraged to participate in the discussion of the design of these strategies with the objective of increasingly aligning their assistance programs to these strategies as they are put in place, thereby strengthening donor coordination and reducing excessive burdens on developing country governments.

    11. Report of the Commonwealth Secretariat/World Bank Joint Task Force on Small States: Ministers welcomed the report to the Development Committee and its analysis of the special characteristics of small states that make them particularly vulnerable, while noting that a number of larger states shared some or all of the same characteristics. They noted the report’s conclusions that tackling small states’ development challenges will take a combination of correct domestic policy action, continued external assistance, and where achievable, improvements in the external environment. They also noted the report’s recommendation that the circumstances of small states should be taken into account in the policies and programs of the multilateral trade, finance and development organizations. The Committee supported World Bank and IMF proposals for their future work programs on the issues of small states, as set out in the report, and agreed that these steps could make a valuable contribution in helping small states face their development challenges.

    12. International Financial Architecture—Role of the World Bank: Ministers welcomed the Bank’s continuing contribution to global efforts to reduce the risk, and mitigate the impact, of future financial crises, noting that actions and policies that reduce vulnerability to crises also support successful development. The Committee welcomed the close collaboration that had developed between the Bank and the Fund on the program of financial sector assessments, the reports on the observance of standards and codes, and the work on debt management. Ministers encouraged the Bank to make systematic use of these assessments in designing, delivering and mobilizing support for capacity building.

    13. IBRD Financial Capacity: Ministers reviewed an updated report on this subject from the World Bank and confirmed that the Bank’s finances remain sound. At the same time, Ministers recognized that the Bank’s financial capacity may at some point limit its ability to respond to future demands. Ministers requested management and the Executive Board to keep this subject under review and continue to report regularly to the Committee.

    14. Next Meeting: The Committee’s next meeting is scheduled for September 25, 2000 in Prague, Czech Republic.

    Appendice VII: Executive Directors and Voting Power on April 30, 2000
    Director AlternateCasting Votes ofVotes by CountryTotal Votes1Percent of Fund Total2
    Karin Lissakers (Vacant)United States371,743371,74317.35
    Yukio YoshimuraJapan133,378133,3786.22
    Haruyuki Toyama
    Bernd EsdarGermany130,332130,3326.08
    Wolf-Dieter Donecker
    Jean-Claude MilleronFrance107,635107,6355.02
    Gilles Bauche
    Stephen PickfordUnited Kingdom107,635107,6355.02
    Stephen Collins
    Willy Kiekens (Belgium)Austria18,973
    Johann Prader (Austria)Belarus4,114
    Czech Republic8,443
    Slovak Republic3,825
    J. de Beaufort Wijnholds (Netherlands)Armenia1,170
    Yuriy G. Yakusha (Ukraine)Bosnia and Herzegovina1,941
    Macedonia, FYR939
    Agustín Carstens (Mexico)Costa Rica1,891
    Hermán Oyarzábat (Venezuela)El Salvador1,963
    Riccardo Faini (Italy)Albania737
    Harilaos Vittas (Greece)Greece8,480
    San Marino42090,6364.23
    Thomas A. Bernes (Canada)Antigua and Barbuda385
    Peter Charleton (Ireland)Bahamas, The1,553
    St. Kitts and Nevis339
    St. Lucia403
    St. Vincent and the Grenadines33380,6363.76
    Olli-Pekka Lehmussaari (Finland)Denmark16,678
    Åke Törnqvist (Sweden)Estonia902
    Gregory F. Taylor (Australia)Australia32,614
    Jong Nam Oh (Korea)Kiribati306
    Marshall Islands275
    Micronesia, Federated States of301
    New Zealand9,196
    Papua New Guinea1,566
    Solomon Islands354
    Sulaiman M. Al-Turki (Saudi Arabia)Saudi Arabia70,10570,1053.27
    Ahmed Saleh Alosaimi (Saudi Arabia)
    Kleo-Thong Hetrakul (Thailand)Brunei Darussalam1,750
    Cyrillus Harinowo (Indonesia)Cambodia1,125
    Lao People’s Democratic Republic641
    José Pedro de Morais, Jr. (Angola)Angola3,113
    Cyrus Rustomjee (South Africa)Botswana880
    Gambia, The561
    Sierra Leone1,287
    South Africa18,935
    A. Shakour Shaalan (Egypt)Bahrain1,600
    Abdelrazaq Faris Al-Faris (United Arab Emirates)Egypt9,687
    Syrian Arab Republic3,186
    United Arab Emirates6,367
    Yemen, Republic of2,68564,0082.99
    Aleksei V. Mozhin (Russia)Russia59,70459,7042.79
    Andrei Lushin (Russia)
    Roberto F. Cippa (Switzerland)Azerbaijan1,859
    Wieslaw Szczuka (Poland)Kyrgyz Republic1,138
    Murilo Portugal (Brazil)Brazil30,611
    Roberto Junguito (Colombia)Colombia7,990
    Dominican Republic2,439
    Trinidad and Tobago3,60653,4222.49
    Vijay L. Kelkar (India)Bangladesh5,583
    A. G. Karunasena (Sri Lanka)Bhutan313
    Sri Lanka4,38452,1122.43
    Abbas MirakhorAlgeria12,797
    (Islamic Republic of Iran)Ghana3,940
    Mohammed Daïri (Morocco)Iran, Islamic Republic of15,222
    WEI Benhua (China)China47,12247,1222.20
    JIN Qi (China)
    Ana Maria Jul (Chile)Argentina21,421
    A. Guillermo Zoccali (Argentina)Bolivia1,965
    Alexandre Barro Chambrier (Gabon)Benin869
    Damian Ondo Mañe (Equatorial Guinea)Burkina Faso852
    Cape Verde346
    Central African Republic807
    Congo, Republic of1,096
    Côte d’Ivoire3,502
    Equatorial Guinea576
    São Tomé and Principe324

    Voting power varies on certain matters pertaining to the General Department with use of the IMF’s resources in that Department.