It would seem unlikely that in order to provide this new facility for its members the Fund would have found it necessary to split itself into two Departments and to require each member to make a contribution equal to its quota, with one fourth normally payable in SDRs and the remainder in the member’s own currency.12 Rather, the following approach would have seemed natural.
If the credit activities of the Fund were run on an SDR basis, the present separation of the two Departments would no longer be necessary, or indeed convenient. In a unified Fund all members that extended credit through the Fund, even if they did not participate in the SDR allocation facility, would have to hold SDRs. That, however, would be predominantly a formal change. All members are now obliged to make their currencies available for sale; hence all members must stand ready, when their reserve and payments position permits, to acquire creditor positions in the Fund. Such positions are denominated in SDRs. Thus, in an economic sense, members are already bound to acquire SDRs.
International Monetary Fund. External Relations Dept.
This paper examines adjustment, growth, and the IMF’s role. Under the Baker plan, the IMF would continue to play a central role in dealing with the economic imbalances and the debt problems that countries face, a role that would continue to include the analysis and policy advice that the IMF brings to discussions with member countries. The IMF’s role will also be to continue to help countries obtain new external financing from commercial banks as well as from official sources.
The two Departments in the Fund use radically different techniques to perform financial functions for members that are in many respects similar: both Departments enable a member in deficit to use financial resources that it had not earned from a previous balance of payments surplus. Use of the resources in both Departments also has a very similar effect on the member that provides the users with foreign exchange: this member acquires, in both cases, reserves in the form of “Fund-related assets,” viz., a “reserve position in the Fund” (a reserve tranche position or a readily repayable loan claim on the Fund) when the transaction takes place in the General Department, and SDRs when it takes place in the Special Drawing Rights Department.