Chapter

SDR Department

Author(s):
International Monetary Fund
Published Date:
October 2008
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SDR Department: Balance sheets as at April 30, 2008, and 2007

(In thousands of SDRs)

20082007
Assets
Net charges and assessments receivable53,74380,716
Overdue charges and assessments (Note 3)13,45540,538
Participants with holdings below allocations (Note 4)
Allocations11,291,30611,033,877
Less: SDR holdings3,596,6593,320,699
Allocations in excess of holdings7,694,6477,713,178
Total assets7,761,8457,834,432
The accompanying notes are an integral part of these financial statements.These financial statements were approved by the Managing Director and the Director of Finance on June 25, 2008.
20082007
Liabilities
Net interest payable53,77980,816
Participants with holdings above allocations (Note 4)
SDR holdings14,995,44915,109,390
Less: allocations10,142,02410,399,453
Holdings in excess of allocations4,853,4254,709,937
Holdings by the General Resources Account1,852,2782,597,564
Holdings by prescribed holders1,002,363446,115
Total liabilities7,761,8457,834,432
The accompanying notes are an integral part of these financial statements.These financial statements were approved by the Managing Director and the Director of Finance on June 25, 2008.
The accompanying notes are an integral part of these financial statements.These financial statements were approved by the Managing Director and the Director of Finance on June 25, 2008.
/s/ Michael G. Kuhn/s/ Dominique Strauss-Kahn
Director, Finance DepartmentManaging Director

SDR Department: Income statements for the years ended April 30, 2008, and 2007

(In thousands of SDRs)

20082007
Revenue
Net charges from participants with holdings below allocations285,305320,180
Assessment on SDR allocations1,5221,035
286,827321,215
Expenses
Interest on SDR holdings
Net interest to participants with holdings above allocations176,036180,493
General Resources Account88,446124,444
Prescribed holders20,82315,243
285,305320,180
Administrative expenses1,5221,035
286,827321,215
Net income
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.

SDR Department: Statements of cash flows for the years ended April 30, 2008, and 2007

(In thousands of SDRs)

20082007
Cash flows from operating activities
Receipts of SDRs
Transfers among participants and prescribed holders3,548,9762,773,068
Transfers from participants and prescribed holders to the General Resources Account1,287,0121,482,993
Transfers from the General Resources Account to participants2,133,2162,655,279
Interest received
Participants191,349167,681
General Resources Account100,851128,953
Prescribed holders20,07813,047
Total receipts of SDRs7,281,4827,221,021
Uses of SDRs
Transfers among participants and prescribed holders3,548,9762,773,068
Transfers from participants and prescribed holders to the General Resources Account1,287,0121,482,993
Transfers from the General Resources Account to participants2,133,2162,655,279
Charges paid by participants309,236306,915
Other3,0422,766
Total uses of SDRs7,281,4827,221,021
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.

SDR Department: Notes to the financial statements for the years ended April 30, 2008, and 2007

1. Nature of operations

The Special Drawing Right (SDR) is an international interest-bearing reserve asset created by the IMF following the First Amendment of the Articles of Agreement in 1969. All transactions and operations involving SDRs are conducted through the SDR Department. The SDR may be allocated by the IMF, as a supplement to existing reserve assets, to members participating in the SDR Department. Its value as a reserve asset derives, essentially, from the commitments of participants to hold and accept SDRs and to honor various obligations connected with the SDR’s proper functioning as a reserve asset.

The resources of the SDR Department are held separately from the assets of all the other accounts owned, or administered by, the IMF. They may not be used to meet the liabilities, obligations, or losses of the Fund incurred in the operations of the General Department or other accounts, except that the SDR Department reimburses the General Department for expenses incurred in conducting the business of the SDR Department.

At April 30, 2008, and 2007, all members of the IMF were participants in the SDR Department. SDRs have been allocated by the IMF to members that are participants in the SDR Department at the time of the allocation in proportion to their quotas in the IMF. Six allocations have been made (in 1970, 1971, 1972, 1979, 1980, and 1981) for a total of SDR 21.4 billion. A proposed amendment of the IMF’s Articles of Agreement was approved by the Board of Governors in January 1998 to allow for a special one-time allocation of SDRs equal to SDR 21.4 billion. The amendment will enter into force after three-fifths of the members having 85 percent of the total voting power have accepted it. As at April 30, 2008, 131 out of 185 members representing 77.7 percent of the total voting power have accepted the proposed amendment. Upon termination of participation in, or liquidation of, the SDR Department, the IMF will provide to holders the currencies received from the participants in settlement of their obligations. The IMF is empowered to prescribe certain official entities as holders of SDRs; at April 30, 2008, and 2007, 15 institutions were prescribed as holders. Prescribed holders do not receive allocations.

The SDR is also used by a number of international and regional organizations as a unit of account or as the basis for their units of account. Several international conventions also use the SDR as a unit of account, notably those expressing liability limits for the international transport of goods and services.

Uses of SDRs

Participants and prescribed holders can use and receive SDRs in transactions and operations by agreement among themselves. Participants can also use SDRs in operations and transactions involving the General Resources Account, such as the payment of charges and repurchases. By designating participants to provide freely usable currency in exchange for SDRs, the IMF ensures that a participant can use its SDRs to obtain an equivalent amount of currency if it has a need because of its balance of payments, its reserve position, or developments in its reserves.

General allocations and cancellations of SDRs

The IMF has the authority to provide unconditional liquidity through general allocations of SDRs to participants in the SDR Department in proportion to their quotas in the IMF. The IMF cannot allocate SDRs to itself or to other holders it prescribes. The Articles of Agreement also provide for the cancellation of SDRs, although to date there have been no cancellations. In its decisions on general allocations of SDRs, the IMF, as prescribed under its Articles, has sought to meet the long-term global need to supplement existing reserve assets in such a manner as will promote the attainment of the IMF’s purposes and avoid economic stagnation and deflation, as well as excess demand and inflation.

2. Summary of significant accounting policies

Basis of preparation and measurement

The financial statements of the SDR Department are prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have been prepared under the historical cost convention. Specific accounting principles and disclosure practices, as set out below, are in accordance with and comply with IFRS and have been applied consistently for all periods presented.

Use of estimates

The preparation of financial statements requires the IMF’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The determination of estimates requires the exercise of judgment based on various assumptions and other factors, such as historical experience and current and expected economic conditions. Actual results could differ from those estimates.

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Unit of account

The functional and presentation currency of the SDR Department is the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of the currencies in the SDR valuation basket. The IMF reviews the SDR valuation basket every five years. The latest review was completed in November 2005, and the current composition of the SDR valuation basket became effective on January 1, 2006.

The currencies in the basket as at April 30, 2008, and 2007, and their amounts were as follows:

CurrencyAmount
Euro0.4100
Japanese yen18.4000
Pound sterling0.0903
U.S. dollar0.6320

As at April 30, 2008, one SDR was equal to US$1.62378 (US$1.52418 as at April 30, 2007).

Interest and charges

Interest is paid on holdings of SDRs. Charges are levied on each participant’s net cumulative allocations plus any negative balance of the participant and unpaid charges. Interest and charges are levied at the same rate and are settled by crediting and debiting the appropriate individual holdings accounts. The SDR Department is required to pay interest to each SDR holder, whether or not sufficient SDRs are received to meet the payment of interest. If sufficient SDRs are not received because charges are overdue, additional SDRs are temporarily created.

The rate of interest on the SDR is determined by reference to the combined market interest rate, which is a weighted average of yields or rates on short-term instruments in the money markets of the euro area, Japan, the United Kingdom, and the United States. The combined market interest rate is calculated each Friday, using the yields or rates of that day. The SDR interest rate, which is set equal to the combined market interest rate, enters into effect on the following Monday and applies through the subsequent Sunday. The average SDR interest rate was 3.64 percent for the financial year ended April 30, 2008 (3.97 percent for the financial year ended April 30, 2007).

Administrative expenses

The expenses of conducting the business of the SDR Department are paid by the IMF from the General Resources Account, which is reimbursed by the SDR Department at the end of each financial year (SDR 1.5 million and SDR 1.0 million for the financial years ended April 30, 2008, and 2007, respectively). For this purpose, the SDR Department levies an assessment on all participants in proportion to their net cumulative allocations.

Overdue obligations

An allowance for losses resulting from overdue SDR obligations would be created if the IMF expected a loss to be incurred; no losses have been incurred.

Adoption of new International Financial Reporting Standards

In September 2007, the International Accounting Standards Board (IASB) issued an amended standard, IAS 1, “Presentation of Financial Statements.” The amended IAS 1 requires presentation of nonowner changes in equity (comprehensive income) either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). The revised IAS 1 will become effective for the financial year ending April 30, 2010, and its implementation is not expected to have a significant impact on the financial position, results of operations, or cash flows of the SDR Department.

3. Overdue charges and assessments

At April 30, 2008, one member (Somalia) was six months or more overdue (since 1991) in meeting its financial obligations, amounting to SDR 13.5 million, to the SDR Department (two members were overdue, on obligations amounting to SDR 40.5 million, as at April 30, 2007). During the financial year ended April 30, 2008, Liberia settled its overdue assessments and charges totaling SDR 30.1 million, which had previously been recognized as income.

Assessments and charges due from members that are six months or more overdue to the SDR Department were as follows as at April 30:

20082007
(In millions of SDRs)
Total13.540.5
Overdue for six months or more12.939.0
Overdue for three years or more10.834.5

4. Allocations and holdings

At April 30, 2008, and 2007, net cumulative allocations to participants totaled SDR 21.4 billion. Participants with holdings in excess of their allocations have established a net claim on the SDR Department, which is represented on the balance sheet as a liability. Participants with holdings below their allocations have used part of their allocations, which results in a net obligation to the SDR Department and is presented as an asset of the Department. Participants’ net SDR positions as at April 30, 2008, and 2007 were as follows:

20082007
BelowAboveBelowAbove
TotalallocationsallocationsTotalallocationsallocations
(In millions of SDRs)
Cumulative allocations21,433.311,291.310,142.021,433.311,033.910,399.4
Holdings of SDRs by participants18,592.13,596.714,995.418,430.13,320.715,109.4
Net SDR positions2,841.27,694.6(4,853.4)3,003.27,713.2(4,710.0)

A summary of SDR holdings is provided below:

20082007
(In millions of SDRs)
Participants18,592.118,430.1
General Resources Account1,852.32,597.5
Prescribed holders1,002.3446.1
21,446.721,473.7
Less: Overdue charges receivable13.440.4
Total holdings21,433.321,433.3

Schedule 1

SDR Department: Statements of changes in SDR holdings for the years ended April 30, 2008, and 2007

(In thousands of SDRs)

General
ResourcesPrescribedTotal
ParticipantsAccountholders20082007
Total holdings, beginning of year18,430,0892,597,564446,11521,473,76821,471,003
Receipts of SDRs
Transfers among participants and prescribed holders
Transactions by agreement806,168245,3101,051,4782,299,714
Operations
Extension of credit557,503557,503
Settlement of financial obligations557,50316,926574,42926,030
IMF-related operations
PRGF-ESF Trust loans225,680225,68083,854
SAF/Trust Fund repayments and interest30,70530,705
PRGF-ESF Trust contributions and payments96,522230,591327,11370,167
PRGF-ESF Trust repayments and interest294,843294,843274,733
PRGF-HIPC contributions, repayments, and interest6,02830,99037,0191,276
Contributions to and deposits in Administered Accounts441,212441,212
Emergency Assistance, SFF subsidy, and HIPC payments8,9938,9936,450
Net interest on SDRs191,34920,078211,427180,728
MDRI grant assistance10,844
Transfers from participants and prescribed holders to the
General Resources Account
Repurchases541,987541,987202,487
Charges694,127694,127870,323
Quota payment47,07547,075409,150
Interest on SDRs100,851100,851128,953
Assessment on SDR allocations1,5171,5171,033
Reimbursement of expenses by MDRI-I Trust2,2522,252
Other5454
Transfers from the General Resources Account to participants
Purchases718,549718,5491,479,924
In exchange for currencies of other members
Acquisitions to pay charges359,057359,057662,644
Remuneration302,765302,765498,062
Other
Refunds and adjustments752,845752,84514,649
Total receipts4,582,9631,387,8631,310,6577,281,4827,221,021
General
ResourcesPrescribedTotal
ParticipantsAccountholders20082007
Uses of SDRs
Transfers among participants and prescribed holders
Transactions by agreement636,599414,8801,051,4782,299,714
Operations
Extension of credit557,503557,503
Settlement of financial obligations574,429574,42926,030
IMF-related operations
PRGF-ESF Trust loans225,680225,68083,854
SAF/Trust Fund repayments and interest30,70530,705
PRGF-ESF Trust contributions and payments230,59196,522327,11370,167
PRGF-ESF Trust repayments and interest294,843294,843274,733
PRGF-HIPC contributions, repayments, and interest30,9906,02837,0191,276
Contributions to and deposits in Administered Accounts441,212441,212
Emergency Assistance, SFF subsidy, and HIPC payments8,9938,9936,450
MDRI grant assistance10,844
Transfers from participants and prescribed holders to the
General Resources Account
Repurchases541,987541,987202,487
Charges694,127694,127870,323
Quota payments47,07547,075409,150
Assessment on SDR allocations1,5171,5171,033
Reimbursement of expenses by MDRI-I Trust2,2522,252
Other5454
Transfers from the General Resources Account to participants
Purchases718,549718,5491,479,924
In exchange for currencies of other members
Acquisitions to pay charges359,057359,057662,644
Remuneration302,765302,765498,062
Other
Refunds and distributions752,845752,84514,649
Charges paid in the SDR department
Net charges due312,279312,279309,681
Total uses4,393,8592,133,216754,4087,281,4827,221,021
Charges not paid when due3,0423,0422,766
Settlement of unpaid charges and assessments(30,129)68(30,061)
Total holdings, end of year18,592,1081,582,2781,002,36321,446,74921,473,768

Schedule 2

SDR Department: Allocations and holdings of participants as at April 30, 2008

(In thousands of SDRs)

Holdings
NetPercentage of(+) Above
cumulativecumulative(-) Below
ParticipantallocationsTotalallocationsallocations
Afghanistan, Islamic Republic of26,7032621.0(26,441)
Albania9,4089,408
Algeria128,6407,9566.2(120,684)
Angola164164
Antigua and Barbuda77
Argentina318,370320,620100.72,250
Armenia12,15412,154
Australia470,545119,20525.3(351,340)
Austria179,045147,58182.4(31,464)
Azerbaijan665665
Bahamas, The10,2301121.1(10,118)
Bahrain6,2007,629123.01,429
Bangladesh47,1201,6233.4(45,497)
Barbados8,0391612.0(7,878)
Belarus616616
Belgium485,246387,18279.8(98,064)
Belize2,1972,197
Benin9,4091161.2(9,293)
Bhutan397397
Bolivia26,70327,466102.9763
Bosnia and Herzegovina20,4816073.0(19,875)
Botswana4,35938,762889.234,403
Brazil358,6703,1460.9(355,524)
Brunei Darussalam12,36112,361
Bulgaria3,9703,970
Burkina Faso9,409880.9(9,321)
Burundi13,6971200.9(13,577)
Cambodia15,4171551.0(15,262)
Cameroon24,4633,03112.4(21,431)
Canada779,290642,88082.5(136,410)
Cape Verde620274.3(593)
Central African Republic9,3251151.2(9,210)
Chad9,4091,03911.0(8,370)
Chile121,92438,23331.4(83,691)
China236,800764,193322.7527,393
Colombia114,271142,751124.928,480
Comoros716212.9(695)
Congo, Democratic Republic of the86,3091,3741.6(84,935)
Congo, Republic of9,7192222.3(9,497)
Costa Rica23,7264401.9(23,286)
Cóte d’Ivoire37,8283520.9(37,476)
Croatia44,2055761.3(43,629)
Cyprus19,4382,08210.7(17,356)
Czech Republic13,00513,005
Denmark178,864171,89396.1(6,971)
Djibouti1,1781028.7(1,076)
Dominica592315.3(561)
Dominican Republic31,585101,129320.269,544
Ecuador32,92917,18852.2(15,741)
Egypt135,92486,66963.8(49,255)
El Salvador24,98525,013100.128
Equatorial Guinea5,8124607.9(5,352)
Eritrea
Estonia6060
Ethiopia11,1601941.7(10,966)
Fiji6,9586,61195.0(347)
Finland142,690154,106108.011,416
France1,079,870628,45858.2(451,412)
Gabon14,0913462.5(13,745)
Gambia, The5,1211042.0(5,017)
Georgia1,4731,473
Germany1,210,7601,411,944116.6201,184
Ghana62,9835270.8(62,456)
Greece103,54416,81816.2(86,726)
Grenada930768.2(854)
Guatemala27,6782,79510.1(24,883)
Guinea17,6041,75410.0(15,850)
Guinea-Bissau1,212534.4(1,159)
Guyana14,5305023.5(14,028)
Haiti13,6974,87935.6(8,818)
Honduras19,0573561.9(18,701)
Hungary59,07559,075
Iceland16,409720.4(16,337)
India681,17011,1941.6(669,976)
Indonesia238,95624,82810.4(214,128)
Iran, Islamic Republic of244,056282,506115.838,450
Iraq68,46489,817131.221,354
Ireland87,26363,59872.9(23,665)
Israel106,3609,9289.3(96,432)
Italy702,400145,31020.7(557,090)
Jamaica40,6134041.0(40,209)
Japan891,6901,933,482216.81,041,792
Jordan16,8873,54621.0(13,341)
Kazakhstan880880
Kenya36,9904271.2(36,563)
Kiribati1111
Korea, Republic of72,91152,21871.6(20,694)
Kuwait26,744147,829552.7121,085
Kyrgyz Republic18,33718,337
Lao People’s Democratic Republic9,4099,793104.1384
Latvia110110
Lebanon4,39322,785518.718,392
Lesotho3,7393,996106.9257
Liberia21,0078,34039.7(12,667)
Libya58,771565,947963.0507,176
Lithuania7070
Luxembourg16,95513,18477.8(3,771)
Macedonia, former Yugoslav Republic of8,3791,04412.5(7,335)
Madagascar19,2702011.0(19,069)
Malawi10,9751751.6(10,800)
Malaysia139,048145,696104.86,648
Maldives282385136.5103
Mali15,9122281.4(15,684)
Malta11,28838,382340.027,094
Marshall Islands
Mauritania9,7191571.6(9,562)
Mauritius15,74418,734119.02,990
Mexico290,020333,594115.043,574
Micronesia, Federated States of1,3581,358
Moldova738738
Mongolia6161
Montenegro175175
Morocco85,68916,48719.2(69,202)
Mozambique114114
Myanmar43,4744611.1(43,013)
Namibia2020
Nepal8,1055,71270.5(2,393)
Netherlands530,340553,725104.423,385
New Zealand141,32216,96412.0(124,358)
Nicaragua19,4831951.0(19,288)
Niger9,4092332.5(9,176)
Nigeria157,1551,2610.8(155,894)
Norway167,770236,548141.068,778
Oman6,26212,462199.06,200
Pakistan169,989135,61179.8(34,378)
Palau
Panama26,3221,5355.8(24,787)
Papua New Guinea9,3001661.8(9,134)
Paraguay13,69728,060204.914,363
Peru91,3197,5258.2(83,794)
Philippines116,5958,2307.1(108,365)
Poland68,32968,329
Portugal53,32078,335146.925,015
Qatar12,82228,725224.015,903
Romania75,95079,024104.03,074
Russian Federation495495
Rwanda13,69720,312148.36,615
St. Kitts and Nevis44
St. Lucia7421,594214.9852
St. Vincent and the Grenadines35451.3(349)
Samoa1,1422,606228.21,464
San Marino1,0321,032
São Tomé and Príncipe620193.0(601)
Saudi Arabia195,527462,233236.4266,706
Senegal24,4625622.3(23,900)
Serbia56,6652,0623.6(54,603)
Seychelles40692.1(398)
Sierra Leone17,45519,807113.52,352
Singapore16,475223,9551,359.3207,480
Slovak Republic980980
Slovenia25,4317,87531.0(17,555)
Solomon Islands654101.5(645)
Somalia13,697(13,697)
South Africa220,360223,049101.22,689
Spain298,805180,79260.5(118,013)
Sri Lanka70,8683,5195.0(67,349)
Sudan52,192(52,192)
Suriname7,7505086.6(7,242)
Swaziland6,4322,54139.5(3,891)
Sweden246,525211,48185.8(35,044)
Switzerland169,142169,142
Syrian Arab Republic36,56436,571100.07
Tajikistan2,3682,368
Tanzania31,3723341.1(31,038)
Thailand84,6526,0267.1(78,626)
Timor-Leste
Togo10,975870.8(10,888)
Tonga442442
Trinidad and Tobago46,2311,5023.2(44,729)
Tunisia34,2433,85111.2(30,392)
Turkey112,30796,67586.1(15,632)
Turkmenistan
Uganda29,3962790.9(29,117)
Ukraine5,1135,113
United Arab Emirates38,73710,88828.1(27,849)
United Kingdom1,913,070212,92611.1(1,700,144)
United States4,899,5306,014,865122.81,115,335
Uruguay49,9775401.1(49,437)
Uzbekistan452452
Vanuatu1,2371,237
Venezuela316,89015,3554.8(301,535)
Vietnam47,6581,7023.6(45,956)
Yemen, Republic of28,7438292.9(27,914)
Zambia68,2988,44512.4(59,853)
Zimbabwe10,200790.8(10,121)
Above allocations10,142,02414,995,449147.94,853,425
Below allocations11,291,3063,596,65931.9(7,694,647)
Total participants21,433,33018,592,108
General Resources Account1,852,278
Prescribed holders1,002,363
Overdue charges13,419
21,446,74921,446,749

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