Journal Issue

Recent Activity: International Monetary Fund

International Monetary Fund. External Relations Dept.
Published Date:
June 1969
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25 Years Since Bretton Woods

In the 25 eventful years since the Bretton Woods Conference of July 1944 the Fund has expanded its membership and financial operations, and its capacity for service to the world economy. There were 44 nations represented at the United Nations Monetary and Financial Conference which produced the Fund’s Articles of Agreement, of which 29 first signed the Agreement on December 27, 1945. Their combined quotas at that time were slightly more than $7 billion.

At the end of the first quarter of this year the Fund’s membership was 111 countries with total quotas equivalent to $21.2 billion. Drawings had been made by 65 members, some of whom had obtained the Fund’s assistance on three or more occasions, and the total of these operations was close to $17.5 billion.

The Fund’s activity during this quarter century also included extensive efforts of consultation and technical assistance directed toward exchange convertibility and nondiscrimination, which are linked in the Fund’s Articles to the promotion of a balanced expansion of trade and improved standards of living. The period has been, marked by notable advances in international financial cooperation, and by greatly increased levels of world trade, which has doubled in value in the last ten years, and more than tripled since 1950. This was accomplished despite numerous foreign payments difficulties experienced from time to time by individual countries, and the recurring problems of many developing members maintaining low levels of reserves.

In the Fund’s second quarter century the new facility of special drawing rights is expected to become an important additional feature of the international monetary system.

Over the years, members of the Fund have increased their financial participation in its work by means of two general increases in quotas and many special increases. In addition, a group of ten major industrial countries has undertaken to supplement the Fund’s resources, if necessary, under its $6 billion General Arrangements to Borrow. The conditions of members’ access to the Fund’s resources have been more closely defined, and liberalized in some respects to deal with special circumstances.

1968 Record Year

More than $13.5 billion of members’ drawings on the Fund have taken place since 1960. In 1968 exchange transactions reached their record annual volume of $3,552 million. This amount was chiefly the result of a series of large drawings by industrial members, with developing countries making only slightly increased use of the Fund’s resources during the year. Fund data indicate, in fact, that the total net drawings of 87 developing countries in Africa, Asia, Latin America, and the Middle East have not risen in proportion to the increases in their Fund quotas over the past decade.

There has been a gradual rise in the total net drawings of developing members since the end of 1958, when the figure was $650 million. It was $740 million in 1960 and rose to nearly $1.2 billion in 1962, to $1.5 billion in 1966, and to $1.8 billion in 1968. Since 1958 the increase in net drawings of developing countries has amounted to $1.1 billion—a rise of approximately 170 per cent over the ten years. In the same period, however, the total quotas of developing countries have risen about 240 per cent, from $1,468 million to $5,032 million.

A regional breakdown shows that the net indebtedness to the Fund of countries in Asia and Latin America declined slightly in total amount during the past year, while total net drawings of African members were a little higher.

The total net drawings of all members reached a peak level in June 1968 of $5,653 million. Since then, however, demands on Fund resources have been less and repayments had diminished the volume of net drawings by the end of March 1969 to $4,682 million. During the first quarter of this year repayments amounted to $482 million compared with new drawings of $79.6 million. March 1969 was the fifth successive month to bring a decline in outstanding drawings.

1969 First Quarter Arrangements

New financial arrangements made by the Fund in the first 1969 quarter were all on behalf of countries with relatively small quotas. Stand-by arrangements were announced for Bolivia ($20 million), Guyana ($4 million), Honduras ($11 million), Panama ($3.2 million), Sierra Leone ($2.5 million), and Somalia ($6 million). Drawings by the Dominican Republic ($6 million) and Iceland ($7.5 million) were also approved.

A payment of $122.5 million by the United Kingdom in March eliminated an obligation incurred in connection with a U.K. quota increase in I960. Net drawings by the United Kingdom were equivalent to $2.4 billion, approximately the amount of the member’s quota in the Fund, at the end of the first 1969 quarter.

Outstanding drawings by the United States, which amounted to $728 million early in 1968, were eliminated by Fund sales of U.S. dollars and by repayments on the part of the United States during the rest of the year. Drawings of U.S. dollars by other members during March 1969 totaled $23.6 million and had the effect of reducing the Fund’s holdings of U.S. dollars below the member’s subscription level for the first time in five years.

Fund Stand-by Arrangements Approved During the First Quarter of 1969

($ millions)
Sierra LeoneMarch2.50
Dominican RepublicJanuary6.00
PanamaFebruary, March5.39
Total drawings in the first quarter of 196979.64
Total net drawings at the end of the first quarter of 19694,682.02


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