Search for other papers by International Monetary Fund in
Current site
Google Scholar
Abstract
The policies which guide the Fund on the use of its resources continue to be those outlined in previous Annual Reports. Members are given the overwhelming benefit of the doubt in relation to requests for transactions within the “gold tranche,” that is, for drawings which do not increase the Fund’s holdings of the currency beyond an amount equal to the member’s quota. The Fund’s attitude to requests for transactions within the “first credit tranche”—that is, transactions which bring the Fund’s holdings of a member’s currency above 100 per cent but not above 125 per cent of its quota—is a liberal one, provided that the member itself is making reasonable efforts to solve its problems. Requests for transactions beyond these limits require substantial justification. They are likely to be favorably received when the drawings or stand-by arrangements are intended to support a sound program aimed at establishing or maintaining the enduring stability of the member’s currency at a realistic rate of exchange. Any drawing exceeding 25 per cent of a member’s quota within any twelve months (except to the extent that the Fund holds less of the member’s currency than 75 per cent of its quota), or any drawing which would increase the Fund’s holdings of that currency to more than 200 per cent of the quota, requires the grant of a waiver in favor of the member, under Article V, Section 4. The first waiver of the former kind was granted in August 1953, and such waivers have since been granted frequently. No country has been granted a waiver for drawings that would increase the Fund’s holdings of its currency beyond the limit of 200 per cent of its quota. The largest amount of a member’s currency, in terms of a percentage of quota, which the Fund has ever held is 175 per cent for a number of countries, but the Fund has granted stand-by arrangements under which the Fund’s holdings of a currency could be increased to 200 per cent of quota.
International Monetary Fund Copyright © 2010-2025. All Rights Reserved.