Back Matter

Back Matter

Author(s):
International Monetary Fund
Published Date:
January 1971
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    Appendices: Transactions and Computations Involving Fluctuating Currencies64

    The Fund has examined certain problems relating to the adjustment of its holdings of fluctuating currencies and to transactions and computations involving such currencies and has come to the following conclusions:

    • I. The Fund does not intend to apply the rules set forth in II below to its holdings of members’ currencies having fluctuating rates when there is no practical interest for the Fund or members to do so. To avoid misunderstanding, it may be useful to point out that these rules do not constitute a formula for dealing with the currencies of countries in which current transactions are conducted at multiple rates.

    • II. Subject to I above, the following rules are adopted:

      Where the foreign exchange value of a currency fluctuates so that exchange transactions in that currency are not based on parity in accordance with Article IV, Section 3,65 and the Fund decides to apply Article IV, Section 8, computations by the Fund relating to that currency (hereinafter referred to as “fluctuating currency”) for the purpose of applying the provisions of the Articles of Agreement of the Fund will be made as follows:

      • 1. (i) Computations will be based on the mid-point between the highest rate and the lowest rate for the United States dollar quoted, for cable transfers for spot delivery, in the main financial center of the country of the fluctuating currency on the day specified in sub-paragraph (ii) below; provided, however, that when prescribed by sub-paragraph (iii) below computations will be based on the mid-point between the highest rate and the lowest rate for the fluctuating currency quoted in New York for cable transfers for spot delivery. Arrangements will be made with the Fund’s depository in the country of the appropriate exchange market as determined hereunder to communicate to the Fund the rates referred to in this sub-paragraph (i).

        • (ii) For the purpose of sub-paragraph (i) the specified day will be:

          • (a) For the sale or purchase by the Fund of a fluctuating currency in exchange for another currency, or the purchase of gold by the Fund under Article V, Section 6(a),66 or the sale of gold by the Fund under Article VII, Section 2,67 or repurchases other than repurchases under Article V, Section 1(b), or borrowing or the repayment of borrowing under Article VII, Section 2, the last business day in the main financial center of the country of the fluctuating currency, before the Fund instructs its depository to transfer or receive the fluctuating currency.

          • (b) For computations for the purpose of Article V, Section 7(b)68 or Article V, Section 8(f),69 the day as of which the computation is made, provided that for computations involving currency substituted pursuant to Schedule B, paragraph 1(d), and paragraph 1 of Executive Board Decision No. 3049-(70/44), adopted May 20, 1970, the specified day will be the last business day before the Fund instructs its depository to receive the payment in that currency.

        • (iii) If a mid-point cannot be determined in the main financial center of the country of the fluctuating currency in accordance with sub-paragraph (i) for the day specified in sub-paragraph (ii), there will be substituted therefor the mid-point for the fluctuating currency in New York determined in accordance with sub-paragraph (i) for the same calendar day. If no such mid-point can be determined for that day, there will then be substituted, to the extent necessary, first the previous business day in the main financial center of the country of the fluctuating currency, and secondly the same calendar day in New York. This procedure will be followed to the extent necessary, until a mid-point is determined in accordance with subparagraph (i), except where the Fund decides to make a special determination under paragraph 6 below.

      • 2. Where as the result of the application of paragraph 1 the amount of currency which the Fund has agreed to sell would exceed the amount that the purchasing member is entitled to purchase under Article V, Section 3(fl)(iii),70 the amount of currency to be sold will be reduced to the amount the purchasing member is entitled to purchase under that provision unless the Fund makes a waiver under Article V, Section 4.

      • 3. The Fund will revalue all of its holdings of a fluctuating currency on the basis of the mid-point employed for a computation under paragraph 1, and such revaluation will take effect as of the day specified for the computation in sub-paragraph (ii) of paragraph 1. As a minimum, revaluation will be made as of each July 31, October 31, January 31, and April 30.

      • 4. Whenever the Fund revalues its holdings of a fluctuating currency under paragraph 3, it will establish an account receivable or an account payable, as the case may be, in respect of the amount of the currency payable by or to the member under Article IV, Section 8. For the purpose of applying the provisions of the Articles as of any date, the Fund’s holdings of the fluctuating currency will be deemed to be its actual holdings plus the balance in any such account receivable or minus the balance in any such account payable as of that date.

      • 5. Any account receivable or payable established under paragraph 4 above will be settled promptly after each July 31, October 31, January 31, and April 30, provided, however, that settlement will not be necessary for any July 31, October 31, or January 31 on which the mid-point as determined under paragraph 1 above does not differ by more than five per cent from the rate for the last settlement. Settlement of any account receivable or payable established under paragraph 4 above will always be made when requested by either the Fund or the member.

      • 6. In any case in which it appears to the Fund that any of the provisions of paragraphs 1 to 5 above are not adequate or satisfactory, the Fund will make a special determination for the treatment of such case.

    • III. Sections I and II above of this decision shall be communicated to members together with SM/54/25 as amended by SM/54/25, Supplement 1 as an explanatory memorandum.

    Investment of Fund’s Assets71

    • I….

      • (3) In any computations for the purpose of applying the provisions of the Articles of Agreement the Fund will treat the following assets as representing gold and not as holdings of United States currency:

        • (a) the dollar proceeds of the sale of gold before investment in United States Treasury bills; and

        • (b) the United States Treasury bills invested in; and

        • (c) the dollar proceeds resulting from the sale or maturity of any such bills before the purchase of gold therewith.

    • II. (1) The Executive Board, acting pursuant to Article XVIII (a) of the Articles of Agreement, interprets Article IV, Section 8(a) to require the United States to maintain the gold value of the assets set forth in paragraph I(3)(a), (b) and (c) above, notwithstanding changes in the par or foreign exchange value of the currency of the United States. This obligation of the United States shall be fully discharged by its maintaining the gold value of the dollar proceeds resulting from the sale of the gold or from the sale or maturity of the U. S. Treasury bills purchased therewith.

      • (2) For the purposes of paragraphs I and II of these decisions the dollar proceeds resulting from the sale or maturity of the U. S. Treasury bills invested in shall not include the income of the investment.

    International Monetary FUND Pamphlet Series

    (* Out of print)

    *1. Introduction to the Fund, by J. Keith Horsefield. (First edition in English, 1964; in French and Spanish, 1965. Second edition in English, 1965; in French and Spanish, 1966; in German, 1967)

    2. The International Monetary Fund: Its Form and Functions, by J. Marcus Fleming (in English, 1964)

    3. The International Monetary Fund and Private Business Transactions: Some Legal Effects of the Articles of Agreement, by Joseph Gold (in English and Spanish, 1965; in French, 1966)

    4. The International Monetary Fund and International Law: An Introduction, by Joseph Gold (in English, 1965; in French, 1966; in Spanish, 1967)

    5. The Financial Structure of the Fund, by Rudolf Kroc. (First edition in English, French, and Spanish, 1965. Second edition in English, French, and Spanish, 1967)

    6. Maintenance of the Gold Value of the Fund’s Assets, by Joseph Gold. (First edition in English, 1965; in French and Spanish, 1967. Second edition in English, 1971; French and Spanish in preparation)

    7. The Fund and Non-Member States: Some Legal Effects, by Joseph Gold (in English, 1966; in French, 1967; in Spanish, 1968)

    8. The Cuban Insurance Cases and the Articles of the Fund, by Joseph Gold (in English, 1966; in Spanish, 1968; in French, 1970)

    9. Balance of Payments: Its Meaning and Uses, by Poul H0st-Madsen (in English, French, and Spanish, 1967; in German, 1968)

    10. Balance of Payments Concepts and Definitions. (First edition in English, French, and Spanish, 1968. Second edition in English, French, and Spanish, 1969)

    11. Interpretation by the Fund, by Joseph Gold (in English, 1968; in French and Spanish, 1969)

    12. The Reform of the Fund, by Joseph Gold (in English, 1969; in French and Spanish, 1970)

    13. Special Drawing Rights, by Joseph Gold. (First edition in English and Spanish, 1969; in French, 1970. Second edition, with subtitle Character and Use, in English, 1970; French and Spanish in preparation)

    14. The Fund’s Concepts of Convertibility, by Joseph Gold (in English, 1971; French and Spanish in preparation)

    The words “by an eighty-five percent majority of the total voting power” were added to the former text by one of the amendments of the Articles that took effect on July 28, 1969. The significance of this change will be discussed later in this pamphlet.

    Proceedings and Documents of the United Nations Monetary and Financial Conference, U. S. Department of State Publication 2866, International Organization and Conference Series I, 3 (Washington, 1948; hereinafter cited as Proceedings and Documents), Doc. 234, p. 313.

    However, amounts due and payable to the Fund in the currency at the date of the change are regarded as part of the Fund’s holdings on that date and subject to adjustment. This principle means that the obligation to adjust the Fund’s holdings in respect of the amount due and payable falls on the currency issuer and not on the obligor. This leads to the following results: If a repurchase obligation in currency Y accrues for member X as of April 30 and the currency is revalued before X discharges its obligation, X must pay the same number of units of currency Y as were calculated, and that part of them which reflects the revaluation will be returned to Y. If X wishes to substitute gold for currency Y under Executive Directors’ Decision No. 7-(648), the amount of gold will be calculated on the basis of the par value of the revalued currency at the date of the discharge of the obligation. The same amount of currency will be returned to Y as would have been returned had there been no substitution of gold. For Executive Directors’ Decision No. 7-(648), see Selected Decisions of the Executive Directors and Selected Documents (Washington, Fourth Issue, April 1, 1970; hereinafter cited as Selected Decisions), pp. 63–64.

    For original members, see Article III, Section 3: “(a) The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository on or before the date when the member becomes eligible under Article XX, Section 4(c) or (d), to buy currencies from the Fund.

    “(b) Each member shall pay in gold, as a minimum, the smaller of (i) twenty-five percent of its quota; or (ii) ten percent of its net official holdings of gold and United States dollars as at the date when the Fund notifies members under Article XX, Section 4(a) that it will shortly be in a position to begin exchange transactions. Each member shall furnish to the Fund the data necessary to determine its net official holdings of gold and United States dollars.

    “(c) Each member shall pay the balance of its quota in its own currency.”

    For other members, see the corresponding provision of Membership Resolutions.

    Article V, Section 7(b): “At the end of each financial year of the Fund, a member shall repurchase from the Fund with each type of monetary reserve, as determined in accordance with Schedule B, part of the Fund’s holdings of its currency under the following conditions: (i) Each member shall use in repurchases of its own currency from the Fund an amount of its monetary reserves equal in value to the following changes that have occurred during the year: one-half of any increase in the Fund’s holdings of the member’s currency, plus one-half of any increase, or minus one-half of any decrease, in the member’s monetary reserves, or, if the Fund’s holdings of the member’s currency have decreased, one-half of any increase in the member’s monetary reserves minus one-half of the decrease in the Fund’s holdings of the member’s currency. This rule shall not apply when a member’s monetary reserves have decreased during the year by more than the Fund’s holdings of its currency have increased, (ii) If after the repurchase described in (i) above (if required) has been made, a member’s holdings of another member’s currency (or of gold acquired from that member) are found to have increased by reason of transactions in terms of that currency with other members or persons in their territories, the member whose holdings of such currency (or gold) have thus increased shall use the increase to repurchase its own currency from the Fund.”

    Schedule B, paragraph 1: “In determining the extent to which repurchase of a member’s currency from the Fund under Article V, Section 7(b), shall be made with each convertible currency and each of the other types of monetary reserve, the following rule, subject to 2 below, shall apply:

    “(a) If the member’s monetary reserves have not increased during the year, the amount payable to the Fund shall be distributed among all types of reserves in proportion to the member’s holdings thereof at the end of the year.

    “(b) If the member’s monetary reserves have increased during the year, a part of the amount payable to the Fund equal to one-half of the increase, minus one-half of any decrease in the Fund’s holdings of the member’s currency that has occurred during the year, shall be distributed among those types of reserves which have increased in proportion to the amount by which each of them has increased. The remainder of the sum payable to the Fund shall be distributed among all types of reserves in proportion to the member’s remaining holdings thereof.

    “(c) If after the repurchases required under Article V, Section 1(b), had been made, the result would exceed either of the limits specified in Article V, Section 7(c)(i) or (ii), the Fund shall require such repurchases to be made by the member proportionately in such manner that these limits will not be exceeded.

    “(d) If after all the repurchases required under Article V, Section 1(b), had been made, the result would exceed the limit specified in Article V, Section 7(c)(iii), the amount by which the limit would be exceeded shall be discharged in convertible currencies as determined by the Fund without exceeding that limit.

    “(e) If a repurchase required under Article V, Section 1(b), would exceed the limit specified in Article V, Section 7(c)(iv), the amount by which the limit would be exceeded shall be repurchased at the end of the subsequent financial year or years in such a way that total repurchases under Article V, Section 1(b), in any year would not exceed the limit specified in Article V, Section 7(c)(iv).”

    Article XXV, Section 7: “(a) Special drawing rights shall be included in a member’s monetary reserves under Article XIX for the purposes of Article III, Section 4(a), Article V, Section 7(b) and (c), Article V, Section 8(f), and Schedule B, paragraph 1. The Fund may decide that in calculating monetary reserves and the increase in monetary reserves during any year for the purpose of Article V, Section 7(b) and (c), no account shall be taken of any increase or decrease in those monetary reserves which is due to allocations or cancellations of special drawing rights during the year.

    “(b) The Fund shall accept special drawing rights: (i) in repurchases accruing in special drawing rights under Article V, Section 7(b); and (ii) in reimbursement pursuant to Article XXVI, Section 4.”

    Article V, Section 3(a): “A member shall be entitled to buy the currency of another member from the Fund in exchange for its own currency subject to the following conditions: (i) The member desiring to purchase the currency represents that it is presently needed for making in that currency payments which are consistent with the provisions of this Agreement; (ii) The Fund has not given notice under Article VII, Section 3, that its holdings of the currency desired have become scarce; (iii) The proposed purchase would be a gold tranche purchase, or would not cause the Fund’s holdings of the purchasing member’s currency to increase by more than twenty-five percent of its quota during the period of twelve months ending on the date of the purchase or to exceed two hundred percent of its quota; …”

    Article XIX(j): “Gold tranche purchase means a purchase by a member of the currency of another member in exchange for its own currency which does not cause the Fund’s holdings of the member’s currency to exceed one hundred percent of its quota, provided that for the purposes of this definition the Fund may exclude purchases and holdings under policies on the use of its resources for compensatory financing of export fluctuations.”

    Either or both of the limits of 25 per cent and 200 per cent of quota in Article V, Section 3(a), can be waived by the Fund under Article V, Section 4, Waiver of conditions: “The Fund may in its discretion, and on terms which safeguard its interests, waive any of the conditions prescribed in Section 3(a) of this Article, especially in the case of members with a record of avoiding large or continuous use of the Fund’s resources. In making a waiver it shall take into consideration periodic or exceptional requirements of the member requesting the waiver. The Fund shall also take into consideration a member’s willingness to pledge as collateral security gold, silver, securities, or other acceptable assets having a value sufficient in the opinion of the Fund to protect its interests and may require as a condition of waiver the pledge of such collateral security.”

    Executive Directors’ Decision No. 1371-(62/36), Selected Decisions, pp. 37-43.

    It may also increase the amount that may be purchased without a waiver of the 25 per cent limit. See Executive Directors’ Decision No. 451-(55/52), Selected Decisions, pp. 20-21.

    Article XIX(j). However, the gold tranche is calculated by excluding any holdings of the member’s currency outstanding under the Fund’s policy on the use of its resources for compensatory financing of export fluctuations. See Selected Decisions, pp. 43-48, 50. If holdings of this character are outstanding and the Fund holds the member’s currency in a total amount exceeding its quota, the member will not be making a net economic contribution of the kind referred to in the text.

    Article V, Section 3(d).

    See Article XXXII (c).

    Article IV, Sections 3 and 4. Section 3: “The maximum and the minimum rates for exchange transactions between the currencies of members taking place within their territories shall not differ from parity (i) in the case of spot exchange transactions, by more than one percent; and (ii) in the case of other exchange transactions, by a margin which exceeds the margin for spot exchange transactions by more than the Fund considers reasonable.”

    Section 4: “(a) Each member undertakes to collaborate with the Fund to promote exchange stability, to maintain orderly exchange arrangements with other members, and to avoid competitive exchange alterations.

    “(b) Each member undertakes, through appropriate measures consistent with this Agreement, to permit within its territories exchange transactions between its currency and the currencies of other members only within the limits prescribed under Section 3 of this Article. A member whose monetary authorities, for the settlement of international transactions, in fact freely buy and sell gold within the limits prescribed by the Fund under Section 2 of this Article shall be deemed to be fulfilling this undertaking.”

    See also Selected Decisions, p. 16: “The Fund does not object to exchange rates which are within 2 per cent of parity for spot exchange transactions between a member’s currency and the currencies of other members taking place within the member’s territories, whenever such rates result from the maintenance of margins of no more than 1 per cent from parity for a convertible, including externally convertible, currency” (Decision No. 904-(59/32)).

    In order to reflect the fact that a determination of the amount of the depreciation can be no more than approximate in many cases, the adjustment is invariably referred to in Fund practice as “provisional” (i.e., provisional pending the establishment of a new par value).

    It is interesting that, under the charters of other international financial institutions, the adjustment of the institution’s holdings of a currency is to be made whenever the par value of that currency, or the par value of that currency in the Fund, is changed, or when there has been a change in foreign exchange value “in the opinion of” the institution. As to de facto changes, therefore, each institution makes its own determinations. See, for example, the following charters: International Bank for Reconstruction and Development (IBRD), Article II, Section 9; Inter-American Development Bank, Article V, Section 3; International Development Association, Article IV, Section 2.

    Article III, Section 3(a); Article XX, Section 4(c).

    Article III, Section 3(a); Article XX, Section 4(d).

    Executive Directors’ Decisions Nos. 237-2 and 649-(57/33), Selected Decisions, pp. 101-109.

    For example, Article I (iii): “To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.”

    Article XII, Section 2(g): “The Board of Governors, and the Executive Directors to the extent authorized, may adopt such rules and regulations as may be necessary or appropriate to conduct the business of the Fund.”

    Article I (iii), see footnote 18, supra. Article IV, Section 4: see footnote 12, supra.

    Moreover, unless the Fund took steps, on the basis of the member’s failure to observe its obligations, to declare the member ineligible to make purchases of other members’ currencies from the Fund, the member itself would continue to be eligible.

    The maintenance of the gold value clause in the IBRD charter does not contain anything corresponding to Article IV, Section 8(a), of the Fund’s provision, even though an earlier version of the Bank’s charter at the Bretton Woods Conference incorporated the Fund’s provision by reference (Proceedings and Documents, Doc. 424, pp. 712-13).

    Executive Directors’ Decision No. 321-(54/32), as amended by Decisions Nos. 1245-(61/45), adopted August 4, 1961; 1283-(61/56), adopted December 20, 1961; and 3272-(71/14), adopted February 23, 1971. For the first three decisions, see Selected Decisions, pp. 7-11; see also Appendices, infra, pp. 51-53.

    Article V, Section 7(b), and Schedule B; see footnote 5, supra.

    For example, see Article V, Section 8(f): “All charges shall be paid in gold. If, however, the member’s monetary reserves are less than one-half of its quota, it shall pay in gold only that proportion of the charges due which such reserves bear to one-half of its quota, and shall pay the balance in its own currency.” Under this Section, the extent to which a member may be able to pay charges on the Fund’s holdings of the member’s currency in its currency instead of in gold depends on the calculation of the member’s monetary reserves.

    Article VIII, Section 3.

    Executive Directors’ Decisions Nos. 488-(56/5), 708-(57/57), 905-(59/32), 1107-(60/50), and 1272-(61/53), Selected Decisions, pp. 138-42, and Appendices, infra, p. 53.

    Article III, Section 5: “The Fund shall accept from any member in place of any part of the member’s currency which in the judgment of the Fund is not needed for its operations, notes or similar obligations issued by the member or the depository designated by the member under Article XIII, Section 2, which shall be non-negotiable, non-interest bearing and payable at their par value on demand by crediting the account of the Fund in the designated depository. This Section shall apply not only to currency subscribed by members but also to any currency otherwise due to, or acquired by, the Fund.”

    Article XIX (f): “The Fund’s holdings of the currency of a member shall include any securities accepted by the Fund under Article III, Section 5.”

    Article XIII, Section 2(a): “Each member country shall designate its central bank as a depository for all the Fund’s holdings of its currency, or if it has no central bank it shall designate such other institution as may be acceptable to the Fund.”

    Article XIII, Section 2(b): “The Fund may hold other assets, including gold, in the depositories designated by the five members having the largest quotas and in such other designated depositories as the Fund may select.”

    Article VII, Section 2: “The Fund may, if it deems such action appropriate to replenish its holdings of any member’s currency, take either or both of the following steps: (i) Propose to the member that, on terms and conditions agreed between the Fund and the member, the latter lend its currency to the Fund or that, with the approval of the member, the Fund borrow such currency from some other source either within or outside the territories of the member, but no member shall be under any obligation to make such loans to the Fund or to approve the borrowing of its currency by the Fund from any other source. (ii) Require the member to sell its currency to the Fund for gold.”

    Executive Directors’ Decision No. 1289-(62/l), as amended by Decisions Nos. 1362-(62/32) and 1415-(62/47), Selected Decisions, pp. 68-81 (p. 79, footnote). See Selected Decisions, pp. 81-82, for renewals.

    Subject, of course, to agreed changes in the amount of units in accordance with Paragraph 5 of the General Arrangements to Borrow (Selected Decisions, p. 70).

    Paragraph 12(a), Selected Decisions, p. 75.

    Article XXXII (c).

    This must be read subject to what is said below as to a uniform change in par values and a waiver of adjustment of the Fund’s currency holdings under Article IV, Section 8(d).

    Selected Decisions, p. 75.

    See also Article XII, Section 2(b)(iii). Authority to take the decision is reserved to the Board of Governors, as it was under the original provision.

    Article XXIV, Section 4.

    See Joseph Gold, The Reform of the Fund, International Monetary Fund, Pamphlet Series No. 12 (Washington, 1969), pp. 52-55.

    It should be noted that widespread changes in par values could be carried out under Article IV, Section 5, instead of Article IV, Section 7. In that event, it would not be possible to decide on a waiver under Article IV, Section 8(d).

    Establishment of a Facility Based on Special Drawing Rights in the International Monetary Fund and Modifications in the Rules and Practices of the Fund: A Report by the Executive Directors to the Board of Governors Proposing Amendment of the Articles of Agreement (Washington, 1968; hereinafter cited as Report on Amendment of the Articles), p. 22.

    Joseph Gold, The Reform of the Fund, pp. 55-57.

    See footnote 5, supra.

    Selected Decisions, p. 74.

    Article IV, Section 5(d): “Uniform changes in par values made under Section 7 of this Article shall not be taken into account in determining whether a proposed change falls within (i), (ii), or (iii) of (c) above.”

    Article XII, Section 5(c): “For the purpose of all computations under this Section, United States dollars shall be deemed to be of the weight and fineness in effect on July 1, 1944, adjusted for any uniform change under Article IV, Section 7, if a waiver is made under Section 8(d) of that Article.”

    The U. S. dollar of the weight and fineness in effect on July 1,1944 is referred to in this discussion as the old dollar, and the U. S. dollar after a uniform proportionate devaluation in which the par value for the U. S. dollar is changed is referred to as the new dollar. If the uniform proportionate change did not apply to the U. S. dollar, the terms of the exposition would have to be different, but the fundamental legal situation would be the same.

    These inartistic terms are used for convenience only. “Debtor” connotes a member of whose currency the Fund holds more than 75 per cent of quota, so that the member has a potential repurchase obligation to reduce the Fund’s holdings to the 75 per cent level. “Creditor” connotes a member of whose currency the Fund holds less than 75 per cent of quota.

    Schedule D, paragraph 2: “If the Fund’s holdings of the currency of the withdrawing member are not sufficient to pay the net amount due from the Fund, the balance shall be paid in gold, or in such other manner as may be agreed….”

    Article V, Section 7(c): “None of the adjustments described in (b) above shall be carried to a point at which … (iii) the Fund’s holdings of any currency required to be used are above seventy-five percent of the quota of the member concerned, …”

    See footnote 48, supra.

    Article XII, Section 5(b): “Whenever voting is required under Article V, Section 4 or 5, each member shall have the number of votes to which it is entitled under (a) above, adjusted:

    • (i) by the addition of one vote for the equivalent of each four hundred thousand United States dollars of net sales of its currency up to the date when the vote is taken, or

    • (ii) by the subtraction of one vote for the equivalent of each four hundred thousand United States dollars of its net purchases of the currencies of other members up to the date when the vote is taken

    provided, that neither net purchases nor net sales shall be deemed at any time to exceed an amount equal to the quota of the member involved.”

    Selected Decisions, p. 75.

    Article III, Section 2: “The Fund shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned. An eighty-five percent majority of the total voting power shall be required for any change in quotas proposed as the result of a general review and a four-fifths majority of the total voting power shall be required for any other change in quotas. No quota shall be changed without the consent of the member concerned.”

    Article XII, Section 2(b): “The Board of Governors may delegate to the Executive Directors authority to exercise any powers of the Board, except the power to: … (ii) Approve a revision of quotas, …”

    Article III, Section 4(b): “If a member consents to a reduction in its quota, the Fund shall, within thirty days after the date of the consent, pay to the member an amount equal to the reduction. The payment shall be made in the member’s currency and in such amount of gold as may be necessary to prevent reducing the Fund’s holdings of the currency below seventy-five percent of the new quota.”

    Report on Amendment of the Articles, p. 79.

    Article XXI, Section 2.

    Article XVII.

    See Joseph Gold, Special Drawing Rights: Character and Use, International Monetary Fund, Pamphlet Series No. 13, 2nd ed. (Washington, 1970), pp. 49-50.

    Ibid., pp. 50-54.

    Executive Directors’ Decision No. 321-(54/32), as amended by Decisions Nos. 1245-(61 /45) and 1283-(61 /56), Selected Decisions, pp. 7-11, and by Decisions Nos. 3272-(71/14), adopted February 23, 1971, and 3325-(71/37), adopted May 4, 1971.

    See footnote 12, supra.

    Article V, Section 6(a): “Any member desiring to obtain, directly or indirectly, the currency of another member for gold shall, provided that it can do so with equal advantage, acquire it by the sale of gold to the Fund.”

    See footnote 32, supra.

    See footnote 5, supra.

    See footnote 25, supra.

    See footnote 6, supra.

    Executive Directors’ Decision No. 488-(56/5), as amended by Decision No. 2844-(69/90), Selected Decisions, pp. 138-40. See also Decisions Nos. 708-(57/57), 905-(59/32), 1107-(60/50), and 1272-(61 /53), Selected Decisions, pp. 140-42.

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