Abstract

Selected Decisions of the International Monetary Fund and Selected Documents

Title Page

Selected Decisions of the International Monetary Fund and Selected Documents

Eleventh Issue

International Monetary Fund

Washington, D.C.

April 30, 1985

Copyright Page

International Standard Serial Number: ISSN 0094-1735

© International Monetary Fund. Not for Redistribution

Preface

This volume, the Eleventh Issue of Selected Decisions of the International Monetary Fund and Selected Documents, presents the decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the International Monetary Fund to which frequent reference is made in the current activities of the Fund. In addition, the volume contains certain documents relating to the Fund and the United Nations. With few exceptions, the decisions are of a general nature and relate to certain obligations, policies, and procedures under the Articles of Agreement.

The issue contains most of the decisions published in the Tenth Issue and in the Supplement to that issue that remain in effect, as well as new decisions adopted after the publication of the Supplement. Decisions of the Fund that are incorporated in the By-Laws, Rules and Regulations are not reproduced in this volume.

Some of the decisions in this volume that were adopted before the entry into force of the Second Amendment of the Fund’s Articles of Agreement on April 1, 1978 contain references to provisions of the Fund’s Articles or Rules and Regulations that were changed by, or because of, the Second Amendment. The corresponding provision that is in effect at the present time is given in a footnote.

GEORGE P. NICOLETOPOULOS

Director

Legal Department

Contents

  • PREFACE

  • SELECTED DECISIONS OF THE EXECUTIVE BOARD

  • SELECTED RESOLUTIONS OF THE BOARD OF GOVERNORS

  • SELECTED DOCUMENTS

  • LIST OF DECISIONS BY NUMBER

  • INTERPRETATIONS UNDER ARTICLE XXIX(a)

  • Selected Decisions of the Executive Board

  • ARTICLE III

  • QUOTAS AND SUBSCRIPTIONS

    • Adjustment of Quotas (408-2)

    • Gold and Currency Subscribed to the Fund and Accounting by Members for Transactions with the Fund (170-3)

    • Guidelines on Payment of Reserve Assets in Connection with Subscriptions (6266-(79/156))

  • ARTICLE IV

  • EXCHANGE ARRANGEMENTS

    • Notification of Exchange Arrangements Under Article IV, Section 2 (5712-(78/41))

    • Surveillance over Exchange Rate Policies (5392-(77/63))

    • Surveillance: Procedures (6026-(79/13))

    • Surveillance over Exchange Rate Policies: Review (7645-(84/40))

    • Implementation of Procedures for Surveillance: Review (7646-(84/40))

    • Surveillance: Procedures—Implementation of Three-Month Period (7427-(83/83))

  • ARTICLE V, SECTION 3(a), (b), AND (c)

  • USE OF FUND’S RESOURCES

    • Interpretation of Articles of Agreement (71-2)

    • Use of Fund’s Resources for Capital Transfers (1238-(61/43))

    • Use of Fund’s Resources: Meaning of “Consistent with the Provisions of this Agreement” in Article V, Section 3 (287-3)

    • Use of Fund’s Resources and Repurchases (102-(52/11))

    • General Policies on Use of the Fund’s Resources: Tranche Policies

    • Guidelines on Conditionality (6056-(79/38))

    • Guidelines on Performance Criteria with Respect to Foreign Borrowing (6230-(79/140))

    • Extended Fund Facility (4377-(74/114), as amended by (6339-(79/179) and 6830-(81/65))

    • Extended Fund Facility: Review of Decision (5220-(76/144), 7558-(83/156), 7857-(84/175))

    • Charge for Extended Arrangements (4720-(75/114))

    • Supplementary Financing Facility (5508-(77/127))

    • Supplementary Financing Facility: Report on Use (6445-(80/43))

    • Review of Supplementary Financing Facility: Initial Disposition (6693-(80/177))

    • Review of the Supplementary Financing Facility (6725-(81/5))

    • Policy on Enlarged Access (6783-(81/40))

    • Policy on Enlarged Access: Period and Annual Review (7599-(84/3), as amended by 7841-(84/165))

    • Policy on Enlarged Access: Guidelines on Access Limits (7600-(84/3), as amended by 7841-(84/165))

    • Policy on Enlarged Access: Use of Ordinary and Borrowed Resources (7601-(84/3))

    • Stand-By Arrangements (270-(53/95), as amended by 876-(59/15) and 1151-(61/6))

    • Forms of Stand-By and Extended Arrangements Under Enlarged Access Policy (6838-(81/70)), as amended by (7048-(82/13), 7688-(84/70) and 7908-(85/26))

    • Elimination of Augmentation of Rights to Purchase Under Stand-By and Extended Arrangements (5706-(78/39))

    • Exclusion of Credit Tranches and Extended Facility (6830-(81/65))

    • Amendment of Stand-By and Extended Arrangements to Utilize Supplementary Financing

      • a. Utilization of Supplementary Financing (7047-(82/13))

      • b. Forms of Stand-By and Extended Arrangements (7048-(82/13))

    • Overdue Payments to the Fund—Purchases from Fund (7908-(85/26))

    • Misreporting and Noncomplying Purchases Under Fund Arrangements—Guidelines on Corrective Action (7842-(84/165))

    • Relationship Between Performance Criteria and Phasing of Purchases Under Fund Arrangements—Operational Guidelines (7925-(85/38))

    • Compensatory Financing of Export Fluctuations (6224-(79/135), as amended by 7602-(84/3))

    • Compensatory Financing of Export Fluctuations: Guidelines on Cooperation (7528-(83/140))

    • Compensatory Financing of Fluctuations in the Cost of Cereal Imports (6860-(81/81), as amended by 7602-(84/3))

    • Compensatory Financing of Fluctuations in the Cost of Cereal Imports: Review (7490-(83/105))

    • Buffer Stock Financing Facility: The Problem of Stabilization of Prices of Primary Products (2772-(69/47), as amended by 4913-(75/207) and 7602-(84/3))

    • Buffer Stock Financing Facility: Fourth International Tin Agreement (3179-(70/102) and 3351-(71/51))

    • Buffer Stock Financing Facility: Fifth International Tin Agreement (5127-(76/91))

    • Buffer Stock Financing Facility: Sixth International Tin Agreement (7247-(82/147))

    • Buffer Stock Financing Facility: 1977 International Sugar Agreement (5597-(77/171))

    • Buffer Stock Financing Facility: International Natural Rubber Agreement, 1979 (7246-(82/147))

  • ARTICLE V, SECTION 3(d) AND (f)

  • USE OF FUND’S RESOURCES

    • Use of Currencies and SDRs in the General Resources Account and Principles and Procedures for Designation

      • a. Assessment of Strength of Member’s Balance of Payments and Gross Reserve Position for the Purposes of Designation Plans, Operational Budgets and Repurchases Under Article V, Section 7 (b) (6273-(79/158) G/S)

      • b. Specification of Currencies by the Fund (6274-(79/158))

      • c. Transfers of SDRs Under Article V, Section 3(f) (6275-(79/158) G/S)

    • Procedures for the Sale of Currencies at the Request of Members with Outstanding Purchases (6352-(79/183))

    • Sales of SDRs and Use of Currencies Through the Operational Budgets (6772-(81/35) G/S)

    • Sales of SDRs and Currencies in the General Resources Account: Level of Fund SDR Holdings (7626-(84/23) S and 7941-(85/50) S)

    • Selection of Currencies by the Fund (6774-(81/35))

  • ARTICLE V, SECTION 5

  • INELIGIBILITY TO USE THE FUND’S GENERAL RESOURCES

    • Use of Fund’s Resources: Limitation and Ineligibility Under Article V, Section 5 (284-3)

    • Use of Fund’s Resources: Postponement and Limitation Under Article V, Section 5 (286-1)

  • ARTICLE V, SECTION 6

  • SALES OF SDRS BY THE FUND (6663-(80/160) S)

  • ARTICLE V, SECTION 7

  • REPURCHASES

    • Early Repurchases (5704-(78/39))

    • Guidelines for Early Repurchase (6172-(79/101))

    • Repurchase (5703-(78/39), as amended by 6862-(81/81) and 5809-(78/88))

    • Attribution of Reductions in Fund’s Holdings of Currencies (6831-(81/65), as amended by 7059-(82/23) and 7704-(84/78))

  • ARTICLE V, SECTION 8

    • Charges: Future Changes in Charges on Fund’s Holdings of Members’ Currencies in Excess of Quota (4239-(74/67))

    • Charges: Media of Payment in General Resources Account (5702-(78/39) G/S, as amended by 7096-(82/57) G/S)

    • Charges: Rate of Charge Under Rule I-6(4) for Financial Year 1985 (7713-(84/85), as amended by 7740-(84/100))

    • Charges: Accounting for Charges from Members with Overdue Obligations (7930-(85/41))

  • ARTICLE V, SECTION 11

  • RATES FOR COMPUTATIONS AND MAINTENANCE OF VALUE (5590-(77/163))

  • ARTICLE V, SECTION 12(f)

  • SPECIAL DISBURSEMENT ACCOUNT (See also pages 333–35)

  • ARTICLE VI, SECTION 1

  • USE OF FUND’S RESOURCES FOR CAPITAL TRANSFERS (See also page 19)

  • ARTICLE VI, SECTION 3

  • CONTROLS ON CAPITAL TRANSFERS (541-(56/39))

  • ARTICLE VII

  • BORROWING

    • General Arrangements to Borrow (1289-(62/1), as amended by 1362-(62/32), 1415-(62/47), 4421-(74/132), 5792-(78/79), 6241-(79/144), and 7337-(83/37))

    • General Arrangements to Borrow: Transferability of Claims (7628-(84/25))

    • General Arrangements to Borrow: Transferability of Claims Under Saudi Arabia’s Borrowing Agreement (7629-(84/25))

    • General Arrangements to Borrow: Association of Switzerland (1712-(64/29))

    • Borrowing Agreement with Swiss National Bank, 1976 (5288-(76/167))

    • Borrowing Agreement with Swiss National Bank, 1977 (5387-(77/61))

    • Borrowing Agreement with Swiss National Bank: Media of Payment of Interest (5331-(77/15))

    • Borrowing Agreement with Swiss National Bank: Medium of Payment of Transfer Charges (5306-(77/2))

    • Borrowing Agreement with Swiss National Bank: Media of Payment of Transfer Charges and Interest (5488-(77/116))

    • General Arrangements to Borrow: Association Agreement with Saudi Arabia (7403-(83/73))

    • Replenishment in Connection with Supplementary Financing Facility (5509-(77/127))

    • Borrowing in Connection with Supplementary Financing Facility: Authorization to Make Calls (6006-(79/3))

    • Transferability of Claims on Fund Under Oil Facility and Supplementary Financing Facility: Meaning of “Net Creditor Position in Fund” (6008-(79/3))

    • Borrowing Arrangements in Connection with Supplementary Financing Facility: Payment of Interest (6163-(79/96))

    • Policy on Enlarged Access: Borrowing Agreement with the Saudi Arabian Monetary Agency (6843-(81/75))

    • Policy on Enlarged Access: Borrowing Agreement with the Saudi Arabian Monetary Agency—Change in Conversion Arrangements (7188-(82/114))

    • Policy on Enlarged Access: Borrowing Agreement with the Saudi Arabian Monetary Agency—Supplementary Agreement (7677-(84/64))

    • Policy on Enlarged Access: Borrowing Agreement with the Bank for International Settlements (BIS) (6863-(81/81), as amended by 6870-(81/83) and 6925-(81/112))

    • Policy on Enlarged Access: Borrowing from Central Banks and Other Official Institutions on Terms Similar to Those of the Agreement with the Bank for International Settlements (BIS) (6864-(81/81))

    • Policy on Enlarged Access: Borrowing Agreement with the Bank for International Settlements (BIS), Japan and the National Bank of Belgium (7677-(84/64))

    • Policy on Enlarged Access: Borrowing Agreements with the Bank for International Settlements, Japan and the National Bank of Belgium—Extension of Commitment Periods (7955-(85/60))

    • Policy on Enlarged Access: Establishment of the Borrowed Resources Suspense Accounts (6844-(81/75))

    • Policy on Enlarged Access: Investment by the Fund of the Currencies Held in the Borrowed Resources Suspense Accounts (6845-(81/75))

    • Guidelines for Borrowing by the Fund (7040-(82/7), as amended by 7589-(83/181))

  • ARTICLE VIII, SECTION 2(b)

  • UNENFORCEABILITY OF EXCHANGE CONTRACTS

    • Unenforceability of Exchange Contracts: Fund’s Interpretation of Article VIII, Section 2(b) (446-4)

  • ARTICLE VIII AND ARTICLE XIV

  • PAYMENTS RESTRICTIONS

    • Payments Restrictions for Security Reasons: Fund Jurisdiction (144-(52/51))

    • Bilateralism and Convertibility (433-(55/42))

    • Retention Quotas: Decision and Letter of Transmittal (201-(53/29))

    • Discrimination for Balance of Payments Reasons (955-(59/45))

    • Article VIII and Article XIV (1034-(60/27))

  • PAYMENTS ARREARS (3153-(70/95))

  • PAYMENTS POLICIES

    • Consultations on Members’ Policies in Present Circumstances (4134-(74/4))

  • MULTIPLE CURRENCY PRACTICES

    • Statement to Members Transmitting Fund’s Decisions on Multiple Currency Practices (237-2)

    • Multiple Currency Practices (649-(57/33))

    • Policy on Multiple Currency Practices (6790-(81/43))

  • VOLUNTARY DECLARATION ON TRADE AND OTHER CURRENT ACCOUNT MEASURES (4254-(74/75))

  • ARTICLE IX, SECTION 7

  • PRIVILEGE FOR COMMUNICATIONS

    • Interpretation of Article IX, Section 7 (534-3)

  • ARTICLE XII, SECTION 3

  • EXECUTIVE DIRECTORS

    • Interpretation of Article XII, Sections 3(b) (i) and 3(f) (2-1)

    • Executive Directors: Article XII, Section 3(c) (574-2, as amended by 2620-(68/141))

    • Additional Appointed Directors (597-4)

    • Adjustment of Quota and Voting Power (180-5)

  • ARTICLE XII, SECTION 7

  • PUBLICATION OF REPORTS

    • Reporting by the Fund of Overdue Obligations (7931-(85/41)

  • ARTICLE XIV

  • RESTRICTIONS ON PAYMENTS AND TRANSFERS: WITHDRAWAL

    • Meaning of “Exceptional Circumstances” in Article XIV, Section 4 (117-1)

  • ARTICLE XV, SECTION 2

  • VALUATION OF THE SPECIAL DRAWING RIGHT

    • Method of Valuation (6631-(80/145) G/S)

    • Method of Collecting Exchange Rates for the Calculation of the Value of the SDR for the Purposes of Rule O-2(a) (6709-(80/189) S)

  • ARTICLE XVII, SECTION 3

  • SPECIAL DRAWING RIGHTS: OTHER HOLDERS (6467-(80/71) S)

    • Bank for International Settlements (BIS): Change in Terms and Conditions of Prescription as Holder of SDRs (6484-(80/77) S)

    • Andean Reserve Fund: Holder of SDRs (6486-(80/77) S)

    • Swiss National Bank: Holder of SDRs (6485-(80/77) S)

  • ARTICLE XVIII, SECTION 2

  • ALLOCATION OF SPECIAL DRAWING RIGHTS

    • Allocations to New Participants (5956-(78/180) S and 6368-(79/191)

  • ARTICLE XIX, SECTION 2

  • SPECIAL DRAWING RIGHTS: ADDITIONAL USES

    • Use of SDRs in Settlement of Financial Obligations (6000-(79/1) S, as amended by 6438-(80/37) S)

    • Use of SDRs in Loans (6001-(79/1) S)

    • Use of SDRs in Pledges (6053-(79/34) S, as amended by 6438-(80/37) S)

    • Use of SDRs in Transfers as Security for the Performance of Financial Obligations (6054-(79/34) S, as amended by 6438-(80/37) S)

    • Use of SDRs in Swap Operations (6336-(79/178) S)

    • Use of SDRs in Forward Operations (6337-(79/178) S)

    • Use of SDRs in Donations (6437-(80/37) S)

  • ARTICLE XIX, SECTION 5

  • DESIGNATION OF PARTICIPANTS TO PROVIDE CURRENCY

    • Review of Rules for Designation and Method of Calculating Designation Amounts (6209-(79/124) S)

  • ARTICLE XIX, SECTION 6

  • RECONSTITUTION

    • Abrogation of Rules for Reconstitution (6832-(81/65) S)

  • ARTICLE XIX, SECTION 7(a)

  • EXCHANGE RATES

    • Representative Rate for the European Currency Unit (ECU) (7041-(82/8) G/S)

  • ARTICLE XX, SECTION 2

  • CHARGES

    • Payment of Net Charges and Assessment in the SDR Department for the Financial Year Ended April 30, 1982 (7116-(82/68) S)

  • ARTICLE XXVI

  • INTERPRETATION (343-(54/47))

  • ARTICLE XXX(c)

  • EXCLUSION OF PURCHASES AND HOLDINGS

    • Exclusion of Purchases and Holdings Under Compensatory Financing of Export Fluctuations (2836-(69/87))

    • Exclusion of Purchases and Holdings Under Buffer Stock Facility (5591-(77/163))

    • Exclusion of Purchases Under Oil Facility for Purpose of Definition of “Reserve Tranche Purchase” (5371-(77/51))

    • Exclusion of Credit Tranches and Extended Facility (6830-(81/65) and 7060-(82/23))

  • ARTICLE XXX(f)

  • FREELY USABLE CURRENCIES (5719-(78/46))

  • GENERAL

  • TRUST FUND (5069-(76/72))

    • Review of Instrument to Establish the Trust Fund and List of Eligible Members (5563-(77/150) TR)

    • Trust Fund: Diversification of Investments

      • a. Amendment of Section III, Paragraph 4(a) of the Trust Instrument (5972-(78/189))

      • b. Diversification of Trust Fund Investments (5973-(78/189) TR)

    • Distribution to Developing Countries of Profits from Gold Sales: Authority to Distribute Profits Through Trust Fund (5709-(78/41) TR)

    • Trust Fund: Procedures for Final Payments of Profits and Loans for the Period July 1, 1976 to June 30, 1978 (5832-(78/95) TR)

    • Trust Fund: Second Period

      • a. Timing of Loan Disbursements (6201-(79/121) TR)

      • b. Extension of Period for Qualification (6202-(79/121) TR)

      • c. Extension of Second Period (6466-(80/68) TR)

    • Trust Fund: Extension of Second Period (6676-(80/168) TR)

    • Trust Fund: Means of Payment of Interest by Members on Their Indebtedness Under Loan Agreements (6358-(79/188) TR)

    • Trust Fund: Means of Repayment by Members on Their Indebtedness Under Loan Agreements (7142-(82/85) TR)

    • Trust Fund: Final Direct Distribution of Profits (6540-(80/98) TR)

    • Trust Fund: Termination and Transfer of Resources to Special Disbursement Account (6704-(80/185) TR)

    • Terms of Repayment of Final Loan Disbursement and Amendment of Trust Instrument (6793-(81/45))

  • Subsidy Account

    • Supplementary Financing Facility: Subsidy Account—Instrument (6683-(80/185) G/TR)

    • Supplementary Financing Facility: Subsidy Account—Investment (6854-(81/78) SBS)

    • Supplementary Financing Facility: Subsidy Account—Subsidy Payments for the Period July 1, 1983 Through June 30, 1984 (7754-(84/108) SBS)

    • Oil Facility: Subsidy Account (4773-(75/136), as amended by 5694-(78/35))

    • Oil Facility: Subsidy Account—Final Review (7420-(83/82))

    • Oil Facility: Subsidy Account—Final Report on Termination (7484-(83/117))

  • Selected Resolutions of the Board of Governors

  • A. Request for Interpretation of the Articles of Agreement as to the Authority of the Fund to Use Its Resources (Resolution No. IM-6)

  • B. Resolution of the United Nations General Assembly 377 (V) Entitled “Uniting for Peace” (Resolution No. 6-8)

  • C. Composite Resolution on the Work of the Ad Hoc Committee on Reform of the International Monetary System and Related Issues and on a Program of Immediate Action (Resolutions Nos. 29-7, 29-8, 29-9, 29-10)

    • Interim Committee: Rules of Procedure

    • Development Committee: Rules of Procedure

    • Changes in the Organization of Work and Structure of the Secretariat Function

  • D. Increases in Quotas of Members—Sixth General Review (Resolution No. 31-2)

  • E. Increases in Quotas of Fund Members—Seventh General Review: Report of the Executive Board to the Board of Governors (Resolution No. 34-2)

  • F. Increases in Quotas of Members—Eighth General Review: Report of the Executive Board to the Board of Governors (Resolution No. 38-1)

  • G. Allocation of Special Drawing Rights for the First Basic Period (Resolution No. 24-12)

  • H. Allocation of Special Drawing Rights for the Third Basic Period: Proposal by the Managing Director of the International Monetary Fund (Resolution No. 34-3)

  • I. Report of the Managing Director to the Board of Governors and to the Executive Board Pursuant to Article XVIII, Section 4(c)

  • Selected Documents

  • A. Agreement Between the United Nations and the International Monetary Fund

  • B. United Nations Convention on the Privileges and Immunities of the Specialized Agencies and Annex V and List of Members Which Have Accepted the UN Convention on Privileges and Immunities of the Specialized Agencies with Respect to the Fund as of April 30, 1985

  • Index

List of Decisions by Number

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Interpretations Under Article XXIX(a)

Interpretation of Articles of Agreement (71-2)

Unenforceability of Exchange Contracts: Fund’s Interpretation of Article VIII, Section 2(b) (446-4)

Interpretation of Article IX, Section 7 (534-3)

Interpretation of Article XII, Sections 3(b)(i) and 3(f) (2-1)

Interpretation of Article XXVI, Section 2* (343-(54/47))