This paper discusses the promotion of IMF Stand-By Arrangements (SBAs), the drafting of private loan agreements, and order in international finance. The IMF approves a SBA or an extended arrangement for the benefit of a member country of the IMF only if the member presents to the IMF a letter of intent in which it sets forth a program of financial and economic adjustment that is likely to solve a present, or to fend off a possible balance-of-payments or reserve problem. A purchase is made in return for the purchasing member’s currency. An extended arrangement is a variant that is in use for the purposes of a particular policy of the IMF.


Washington, D.C.


International Standard Serial Number: ISSN 0538-8759

Reprinted March 1986


  • Prefatory Note

  • Stand-By Arrangements and Initiative

  • Official Policy to Encourage Requests

  • Private Lenders and Stand-By Arrangements

  • Legal Ties Between Stand-By Arrangements and Loan Agreements

    • First Category: Representations on Entry into Loan Agreement

      • “In Good Standing”

      • Eligibility

      • Resources of the Fund

      • Legal Impediments to Loans

    • Second Category: Individual Advances Under Loan Agreement

      • Eligibility

      • Interruption Without Ineligibility: Performance Criteria

      • Limitation of Use

      • Elements Not Made Performance Criteria

      • First Installment of Resources

      • Full Use of Phased Resources

      • Reviews

      • Ability to Purchase a Specified Currency

      • “SDR Facilities”

      • Other Provisions on Use Under Stand-By Arrangements

    • Third Category: Defaults

    • Fourth Category: Documents and Information

  • Certification by the Fund

  • Members in Balance of Payments Surplus

  • A Concluding Comment

  • Appendices

  • A. Form of Stand-By Arrangement Under Enlarged Access Policy

  • B. Form of Extended Arrangement Under Enlarged Access Policy

  • Notes

Prefatory Note

The opinions expressed in this pamphlet are those of the author, Senior Consultant and formerly General Counsel and Director of the Legal Department of the International Monetary Fund, and they do not necessarily reflect the views of the Fund.

June 1982