Chapter

General Department

Author(s):
International Monetary Fund
Published Date:
September 2009
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Consolidated statements of financial position at April 30, 2009, and 2008

(In millions of SDRs)

20092008
Assets
Usable currencies151,982163,072
Credit outstanding (Notes 5 and 6)20,4265,896
Other currencies37,19940,823
Total currencies (Note 5)209,607209,791
SDR holdings2,1331,852
Interest and charges receivables (Note 11)9776
Investments (Note 7)6,7966,786
Gold holdings (Note 8)5,8525,852
Other assets (Notes 9 and 18)714646
Structural Adjustment Facility loans (Note 6)99
Total assets225,208225,012
Liabilities (including quotas)
Remuneration payable2444
Investment trades payable167206
Other liabilities248140
Accrued MDRI-I Trust grants (Note 10)102189
Special Contingent Account (Note 15)1,1881,188
Quotas, represented by (Note 5)
Reserve tranche positions28,19513,482
Subscription payments189,178203,891
Total quotas217,373217,373
Total liabilities (including quotas)219,102219,140
Reserves of the General Resources Account5,9055,751
Retained earnings of the Investment Account
Resources of the Special Disbursement Account201121
Total liabilities, reserves, and resources225,208225,012
The accompanying notes are an integral part of these consolidated financial statements.The financial statements were approved by the Managing Director and the Director of Finance on June 30, 2009.
The accompanying notes are an integral part of these consolidated financial statements.The financial statements were approved by the Managing Director and the Director of Finance on June 30, 2009.
/s/ Andrew Tweedie/s/ Dominique Strauss-Kahn
Director, Finance DepartmentManaging Director

General Department: Consolidated statements of comprehensive income for the years ended April 30, 2009, and 2008

(In millions of SDRs)

20092008
Operational income
Interest and charges (Note 11)367512
Interest on SDR holdings3488
Net income from investments (Note 7)377329
Other charges and income (Note 11)8510
863939
Operational expenses
Remuneration (Note 16)175375
Administrative expenses (Note 17)532681
7071,056
Net operational income/(loss)156(117)
MDRI grant assistance (Note 10)78103
Transfers to the Special Disbursement Account (Note 12)31
Contribution from the Special Disbursement Account to the PRGF-ESF Trust (Note 12)(31)
Other comprehensive income
Net comprehensive income/(loss)234(14)
Net comprehensive income/(loss) of the General Department comprises
Net comprehensive loss of the General Resources Account(218)(443)
Net comprehensive income of the Investment Account372317
Net comprehensive income of the Special Disbursement Account80112
234(14)
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

General Department: Consolidated statements of changes in reserves, resources and retained earnings for the years ended April 30, 2009, and 2008

(In millions of SDRs)

General Resources AccountSpecial

Disbursement
Investment

Account
SpecialGeneralTotalAccountretained
reservereservereservesresourcesearnings
Balance at April 30, 20072,3573,5205,8779
Net comprehensive (loss)/income(443)(443)112317
Transfers317317(317)
Balance at April 30, 20082,2313,5205,751121
Net comprehensive (loss)/income(218)(218)80372
Transfers372372(372)
Balance at April 30, 20092,3853,5205,905201
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

General Department: Consolidated statements of cash flows for the years ended April 30, 2009, and 2008

(In millions of SDRs)

20092008
Usable currencies and SDRs from operating activities
Net comprehensive income/(loss)234(14)
Adjustments to reconcile net comprehensive income/(loss) to usable resources generated by operations
Depreciation and amortization2422
Interest and charges(367)(512)
Interest on SDR holdings(34)(88)
Interest income from investments(202)(224)
Remuneration175375
(170)(441)
Changes in interest and charges receivables and other assets(71)195
Changes in remuneration payable and other liabilities7063
Changes in accrued MDRI-I Trust grants(87)(110)
Changes in the Special Contingent Account(525)
(258)(818)
Usable currencies and SDRs from credit to members
Purchases in currencies and SDRs, including reserve tranche purchases(16,363)(1,467)
Repurchases in currencies and SDRs1,8332,905
(14,788)620
Interest received
Interest and charges334397
Interest on SDR holdings46101
Interest from investments196222
Remuneration paid(196)(303)
Net usable currencies and SDRs (used in)/provided by operating activities(14,408)1,037
Usable currencies and SDRs from investment activities
Acquisition of fixed assets(22)(16)
Net acquisition of investments(3)(252)
Net usable currencies and SDRs used in investment activities(25)(268)
Usable currencies and SDRs from financing activities
Subscription payments in SDRs and usable currencies156
Changes in composition of usable currencies3,624412
Net usable currencies and SDRs provided by financing activities3,624568
Net (decrease) increase in usable currencies and SDRs(10,809)1,337
Usable currencies and SDRs, beginning of year164,924163,587
Usable currencies and SDRs, end of year154,115164,924
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

General Department: Notes to the consolidated financial statements for the years ended April 30, 2009, and 2008

1. Nature of operations

The International Monetary Fund (IMF) is an international organization with 185 member countries. It was established to promote international monetary cooperation and exchange stability and to maintain orderly exchange arrangements among members; to facilitate the expansion and balanced growth of international trade, and contribute thereby to the promotion and maintenance of high levels of employment; and to provide temporary financial assistance under adequate safeguards to member countries to assist in solving their balance of payments problems in a manner consistent with the provisions of the IMF’s Articles of Agreement.

The IMF conducts its operations and transactions through the General Department and the Special Drawing Rights Department (the SDR Department), which are distinct entities. The General Department consists of three accounting entities: (1) the General Resources Account (GRA), (2) the Investment Account (IA), and (3) the Special Disbursement Account (SDA). The SDA includes the Multilateral Debt Relief Initiative-I Trust (MDRI-I Trust), for which the IMF is the Trustee and over which the SDA has control.

The resources of the SDR Department are held separately from the assets of all the other accounts owned, or administered by, the IMF. These resources may not be used to meet the liabilities, obligations, or losses 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. As the IMF does not have control over the SDR Department, the financial statements of the SDR Department are presented separately.

The IMF also administers and/or executes trusts and trust fund accounts established by member countries to perform financial and technical services consistent with the IMF’s purposes. The resources of these trusts and trust fund accounts are contributed by members or by the IMF through the SDA. The assets of the trusts and trust fund accounts do not belong to the General Department and the IMF does not have the power to govern the financial and operating policies of the trusts it administers as Trustee, so as to derive benefits from their activities, and therefore the financial statements of these entities are presented separately.

General Resources Account

The operating activities of the IMF through which transactions with members occur are primarily conducted through the GRA. The assets and liabilities in the GRA reflect the payment of quota subscriptions, use and repayment of credit, collection of charges from borrowers, payment of interest (remuneration) on creditor positions, and other operating activities.

Investment Account

The IA holds resources transferred from the GRA (about SDR 6 billion in 2006) to broaden the IMF’s income base. The investment objective of the IA is to generate returns that exceed the SDR interest rate over time while minimizing the frequency and extent of negative returns and underperformance. Investments comprise primarily fixed-income securities. The earnings generated by the IA may be retained in the IA or transferred to the GRA to help meet the expenses of conducting the business of the IMF.

Special Disbursement Account

The SDA is the vehicle for receiving and investing profits from the sale of the IMF gold held at the time of the Second Amendment of the Articles of Agreement (1978). SDA resources can be used for various purposes, including transfers to the GRA for immediate use in operations and transactions, transfers to the IA, or to provide balance of payment assistance on special terms to developing member countries in difficult circumstances.

The SDA also holds claims related to outstanding loans extended under the Structural Adjustment Facility (SAF). Repayments of principal and interest from SAF loans are transferred from the SDA to the Poverty Reduction and Growth Facility and Exogenous Shocks Facility Trust (PRGF-ESF Trust), which is administered separately by the IMF as Trustee.

Multilateral Debt Relief Initiative

The Multilateral Debt Relief Initiative (MDRI) provides debt relief to qualifying low-income member countries (see Note 10). For this purpose, the MDRI-I and MDRI-II Trusts were established on January 5, 2006, to provide grant assistance to eligible members under the MDRI. As the IMF has control over the MDRI-I Trust, the latter’s financial statements are consolidated with those of the General Department.

2. Basis of preparation and measurement

The consolidated financial statements of the General Department are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). They have been prepared under the historical cost convention, except for the revaluation of financial instruments at fair value through profit and loss. Certain comparative figures have been reclassified in Note 4 to conform with changes in the presentation for the current year.

New International Financial Reporting Standards and Interpretations

During the financial year ended April 30, 2009, the IMF has implemented Revised IAS 1, “Presentation of Financial Statements.” Revised IAS 1 requires presentation of non-owner 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 revision does not have a significant impact on the presentation of the consolidated financial statements.

Amended IAS 39, “Financial Instruments: Recognition and Measurement” permits an entity to reclassify non-derivative financial assets (other than those designated at fair value through profit or loss upon initial recognition) out of the fair value through profit or loss category in particular circumstances. An entity that has reclassified a financial asset is required to disclose the amount reclassified and the reason for the reclassification under the Amended IFRS 7, “Financial Instruments: Disclosures. “ The amendments, effective from July 1, 2008, have no effect on the General Department’s consolidated financial statements.

Amended IAS 32, “Financial Instruments: Presentation” requires classification as an equity instrument particular types of puttable financial instruments that represent the residual interest in the net assets of an entity even though they meet the definition of a financial liability. The amended IAS 32 will become effective for the financial year ending April 30, 2010 and is not expected to have a material impact on the General Department’s consolidated financial statements.

IFRIC 14, “IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction” provides guidance on the circumstances under which refunds or reductions in contributions from a defined benefit plan should be regarded as available to an entity for the purpose of recognizing a net defined benefit asset under IAS 19. IFRIC 14, which became mandatory for the General Department’s consolidated financial statements for the financial year ended April 30, 2009, does not have a material impact on its financial position, results of operations or cash flows.

Amended IFRS 7, “Financial Instruments: Disclosures” requires the disclosures of the methods and underlying assumptions applied in determining fair values of financial assets or financial liabilities. An entity must also disclose the remaining contractual maturities for financial liabilities and how it manages the related liquidity risk. The amended IFRS 7 will become effective for the financial year ended April 30, 2010, and is expected to enhance the General Department’s disclosures of its financial assets and financial liabilities.

Unit of account

These consolidated financial statements are presented in Special Drawing Right (SDR), which is the IMF’s functional unit of account. 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 at five-year intervals and the current composition of the SDR valuation basket became effective on January 1, 2006. The currencies in the basket at April 30, 2009, and 2008 and their amounts were as follows:

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

At April 30, 2009, one SDR was equal to US$1.49783 (US$1.62378 at April 30, 2008).

Use of estimates and judgment

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the consolidated financial statements are described in Notes 3, 10, 17, and 18.

3. Summary of significant accounting and related policies

The accounting policies set out below comply with IFRS and have been applied consistently for all periods presented.

Basis of consolidation

The consolidated financial statements include the GRA, the IA, the SDA, and the MDRI-I Trust, an entity that the SDA controls. Control is achieved where the IMF has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All transactions and balances between these entities have been eliminated during the consolidation.

Quotas and reserve tranche positions

The IMF’s resources are provided by its members through the payment of quotas, which broadly reflect each member’s relative economic size. Quotas also determine each member’s relative voting power, access to financing, and share in SDR allocations. The IMF conducts general reviews of all members’ quotas at five-year intervals. The reviews allow the IMF to assess the adequacy of quota resources to meet its financing needs and to allow for adjustments of members’ quotas to reflect their relative positions in the world economy. A quarter of a member’s quota is normally paid in reserve assets, and the remainder paid in the member’s own currency. Should a member withdraw from the IMF, its quota subscription is refunded to the extent it is not needed to settle the net obligations of the member to the IMF.

A member’s reserve tranche is equivalent to its quota less the GRA’s holdings of its currency, excluding holdings that reflect the member’s use of GRA credit. Reserve tranches result from quota payments and from the use of the member’s currency in the GRA’s transactions or operations. A member’s reserve tranche is considered a part of its international reserves and a liquid claim against the GRA.

Quota subscriptions and the reserve tranche positions are classified as liabilities as they embody an unconditional obligation to redeem the instrument upon a member’s withdrawal from the IMF.

Currencies

Currencies consist of members’ currencies and securities held by the GRA. Usable currencies are currencies of members with a strong balance of payments and reserves position that can be used by the GRA to finance the use of resources. Usable currencies and the GRA’s SDR holdings are considered cash equivalents for financial statement presentation purposes. Other currencies are not used to finance the use of resources by members, and therefore are not considered cash equivalents for financial statement presentation purposes.

All currencies in the GRA are revalued periodically in terms of the SDR, including at each financial year end, and members are required to settle the currency valuation adjustments promptly thereafter. The currency balances in the statements of financial position include the receivables and payables arising from the revaluation.

SDR holdings

SDRs are not allocated to the IMF, but the IMF can hold SDRs which it acquires from members in the settlement of their financial obligations to the IMF, and it can use SDRs in transactions and operations with members. The IMF earns interest on its SDR holdings at the same rate earned by other holders of SDRs.

Credit outstanding

Credit outstanding represents financing provided to members under the various IMF credit facilities. Members receive credit in the GRA by purchasing SDRs or usable currencies in exchange for their own currencies. IMF credit is repaid by members by repurchasing holdings of their currencies in exchange for SDRs or usable currencies. Depending on the type of IMF credit facility, repayment periods for GRA credit currently vary from 3¼ to 10 years.

An impairment loss would be recognized if there is objective evidence of impairment as a result of a past event that occurred after initial recognition, and is determined as the difference between the outstanding credit’s carrying value and the present value of the estimated future cash flows. Such cash flows take into account the proceeds from the burden-sharing mechanism, explained below. No impairment losses have been recognized in the financial years ended April 30, 2009, and 2008.

Burden-sharing mechanism and Special Contingent Account

The IMF excludes from income interest charged on the use of IMF resources by members that are at least six months overdue in meeting any financial obligation to the IMF. The IMF fully recovers such income under the burden-sharing mechanism, through adjustments to the interest (charges) paid by debtor members and interest (remuneration) paid to creditor members. Members that participate in burden sharing for overdue charges receive refunds to the extent that the overdue charges are subsequently settled.

In view of the risk resulting from overdue obligations, the IMF accumulates balances in the first Special Contingent Account (SCA-1) by generating resources under the burden-sharing mechanism. The SCA-1 is intended to address the risks posed to the IMF by overdue financial obligations and balances in the SCA-1 would serve as the first line of defense if the IMF were to incur any loss from overdue obligations. Balances in the SCA-1 are refundable to the members that shared the cost of its financing, in proportion to their contributions, when there are no outstanding overdue repurchases and charges, or at such earlier time as the IMF may decide (See Note 15).

Investments

The IMF has designated its investments in fixed-income securities, other than fixed-term deposits, as financial assets held at fair value through profit or loss. Such designation may be made only upon initial recognition and cannot subsequently be changed. The designated assets are carried at fair value on the statements of financial position, with the change in fair value included in the statements of comprehensive income in the period in which they arise.

Recognition

Investments are recognized on the trade date at which the IMF becomes a party to the contractual provisions of the instrument.

Derecognition

Investments are derecognized when the contractual rights to the cash flows from the asset expire, or in transactions in which substantially all the risks and rewards of ownership of the investment are transferred.

Fair value measurement

The determination of the fair value of investments, other than fixed-term deposits, is based on quoted market prices for financial instruments traded in active markets. The carrying amount of fixed-term deposits, which typically have maturities of 12 months or less, approximates the fair value.

Investment income

Investment income comprises interest income, realized gains and losses, and unrealized gains and losses, including currency valuation differences arising from exchange rate movements against the SDR.

Gold holdings

The IMF values its gold holdings at historical cost using the specific identification method. In accordance with the provisions of the Articles, whenever the IMF sells gold held on the date of the Second Amendment of the Articles, the portion of the proceeds equal to the historical cost must be placed in the GRA. Any portion of the proceeds in excess of the historical cost will be held in the SDA or transferred to the IA (see Note 8).

Other assets

Other assets include primarily fixed assets, and net assets for pension and other postretirement benefits (see Notes 9 and 18).

Tangible and intangible fixed assets with a cost in excess of a threshold amount are capitalized and depreciated or amortized over their estimated useful lives using the straight-line method. Buildings, equipment, and furniture are depreciated over 30, 3, and 7 years, respectively. Software is amortized over 3 to 5 years.

The IMF has a defined benefit Staff Retirement Plan (SRP) that covers substantially all eligible staff, a Supplemental Retirement Benefits Plan (SRBP) for selected participants of the SRP, and the Retired Staff Benefits Investment Account (RSBIA), to hold and invest resources set aside to fund the cost of the postretirement benefits. The pension plans and other postretirement assets are measured at fair value at the end of the reporting period. Pension costs and expected costs of the postretirement medical and life insurance benefits are determined using the Projected Unit Credit Method.

Borrowings

The IMF may borrow funds on terms and conditions agreed between the IMF and the lenders. Borrowings are recorded and subsequently stated at amortized cost (see Note 13).

Reserves of the General Resources Account

The IMF’s reserves (retained earnings) consist of the General Reserve and the Special Reserve. The General Reserve may be used to meet capital losses or operational deficits or for distribution, and the Special Reserve can be used for the same purposes except distribution.

The IMF determines annually what part of its net income (if any) will be retained and placed in the General Reserve or the Special Reserve, and what part, if any, will be distributed. Net losses are charged against the Special Reserve under currently applicable Executive Board decisions.

Charges

The IMF earns interest, referred to as charges, on members’ use of IMF credit. The basic rate of charge is set at the beginning of each financial year as the SDR interest rate plus a margin expressed in basis points that is determined by the Executive Board. The SDR interest rate is determined weekly by reference to the weighted average yields on short-term instruments in the capital markets of the Euro area, Japan, the United Kingdom, and the United States.

Credit outstanding exceeding 300 percent of quota for purchases in the credit tranches under the Stand-By Arrangements or the Extended Fund Facility is subject to a surcharge of 200 basis points. Credit outstanding in excess of 300 percent of quota for purchases in the credit tranches under the Stand-By Arrangements or the Extended Fund Facility, and outstanding for more than three years, shall be subject to an additional surcharge of 100 basis points. Special charges are levied on members’ currency holdings that are not repaid when due and on overdue charges. Special charges do not apply to members that have overdue obligations of six months or more overdue. A service charge is levied by the IMF on all purchases except reserve tranche purchases. A refundable commitment fee is charged on arrangements. At the expiration or cancellation of an arrangement, the unrefunded portion of the commitment fee is recognized as current income.

Remuneration

The IMF pays interest, referred to as remuneration, on a member’s reserve tranche position. A portion of the reserve tranche is unremunerated: that portion is equal to 25 percent of the member’s quota on April 1, 1978 (that part of the quota that was paid in gold prior to the Second Amendment of the Articles). For a member that joined the Fund after that date, the unremunerated reserve tranche is the same percentage of its initial quota as the average unremunerated reserve tranche was as a percentage of the quotas of all other members when the new member joined the Fund.

The rate of remuneration is equal to the SDR interest rate less burden-sharing adjustments. The adjusted rate of remuneration cannot be less than 80 percent of the SDR interest rate.

Special Disbursement Account

Loans under the SAF are at concessional interest rates of ½ of 1 percent per annum. The last SAF loan disbursement was made in 1995 and currently one member (Somalia) has overdue SAF repayment obligations. Repayments of SAF loans to the SDA are transferred to the PRGF-ESF Trust when received. Allowances for loan losses would be established if and when there is objective evidence that an impairment loss on loans has been incurred.

Provisions

Provisions are recognized when the IMF has a current legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are measured at the present value of the amounts that are expected to be paid to settle the obligations.

4. Risk management

The IMF is exposed to various types of operational and financial risks, including credit, market, liquidity, and income risks. The principal risk facing the IMF is credit risk resulting from its financing operations and unique role in the international monetary system.

Risk management framework

The Executive Board of the IMF has overall responsibility for the establishment and oversight of the IMF’s risk management framework. The risk management framework encompasses primarily strategic, core mission, financial and operational risks. As part of this framework, the Advisory Committee on Risk Management has been established to analyze, synthesize and report risks. Annual assessments of risks are conducted to (i) report on the perception of residual risks, after taking account of mitigation measures in place; (ii) appraise of risks and efforts to mitigate risks in other areas of the IMF; and (iii) bring to the attention of Office of Internal Audit areas of residual risk, so that these can be taken into account in the design of annual audit plans. Financial risks are also reviewed as part of the annual comprehensive risk assessment exercise.

Credit risk

Credit outstanding

Credit risk refers to potential losses on credit outstanding owing to the inability or unwillingness of member countries to make repurchases. Credit risk is inherent since the IMF has limited ability to diversify its loan portfolio and generally provides financing when other sources are not available to a member. In addition, the IMF’s credit concentration is high. The use of credit in the GRA by the largest users was as follows at April 30:

20092008
(In millions of SDRs and as a percentage
of total GRA credit outstanding)
Largest user of credit6,32331.0%4,18070.9%
Three largest users of credit14,42870.6%4,91083.3%
Five largest users of credit17,62886.3%5,31990.2%

The five largest users of GRA credit at April 30, 2009, in descending order, were Hungary, Turkey, Ukraine, Pakistan, and Iceland (Turkey, the Dominican Republic, Liberia, Sudan and Ukraine at April 30, 2008).

The concentration of GRA outstanding credit by region was as follows at April 30:

20092008
(In millions of SDRs and as a percentage
of total GRA credit outstanding)
Africa6543.2%76613.0%
Asia and Pacific2,88614.1%2674.5%
Europe11,42655.9%1963.3%
Latin America and Caribbean2971.5%3956.7%
Middle East and Turkey5,16325.3%4,27272.5%
Total20,426100%5,896100%

Measures to help mitigate the IMF’s credit risk include policies on access limits, program design, monitoring, pre-set qualification criteria and conditionality attached to IMF financing; early repurchase policies; and preventative, precautionary, and remedial measures to cope with the financial consequences of protracted arrears.

The IMF has established limits on overall access to resources in the GRA, excluding access under newly established Flexible Credit Line (FCL) arrangements. The annual overall limit for these purposes is currently set at 200 percent of a member’s quota, with a cumulative limit of 600 percent of a member’s quota. Access in excess of these limits can be granted in exceptional circumstances. There is no pre-specified maximum on such access, although the IMF will assess factors such as the size of balance of payment pressures, the member’s debt sustainability and its ability to regain access to financing from other sources, and the strength of policies to be adopted. Under such circumstances, disbursements tend to be front-loaded with smaller subsequent tranches.

The IMF generally provides financial assistance to a member under an economic program adopted by the member to help it overcome its balance of payments difficulties. IMF assistance may be disbursed in tranches or the entire amount could be made available upfront. With the exception of the FCL, which provides qualified members access to IMF resources with no prior conditions, IMF financial assistance is subject to conditionality in the form of performance criteria and periodic reviews. Safeguards assessments of member central banks are normally undertaken to provide the IMF with reasonable assurance that each central bank’s legal structure, controls, and accounting, reporting, and auditing systems are adequate to ensure the integrity of its operations and help ensure that IMF resources are used for intended purposes. Misreporting by member countries may entail early repurchases for noncomplying purchases.

The IMF maintains precautionary balances consisting of its reserves and the SCA-1 that would be used to cover losses from possible overdue repurchase obligations. At April 30, 2009, precautionary balances amounted to SDR 7.1 billion, compared to SDR 6.9 billion at April 30, 2008. In addition, the burden-sharing mechanism generates resources to offset the loss of income due to unpaid charges and thereby helps protect the IMF’s overall income and financial position.

The maximum credit risk exposure is the carrying value of the Fund’s credit outstanding and undrawn commitments (see notes 6 and 14).

Investments

Credit risk on investments represents the potential loss that the IMF may incur if obligors and counterparties default on their contractual obligations. This risk is managed through the conservative range of eligible investments, which at present is limited to (i) domestic government bonds of countries in the Euro area, Japan, the United Kingdom, and the United States, that is, members whose currencies are included in the SDR basket; (ii) bonds of international financial organizations; and (iii) claims on the Bank for International Settlements (BIS). Credit risk is further minimized by restricting eligible investments to financial instruments rated A or higher by a major credit rating agency. Compliance controls are enforced to ensure that the investment portfolio does not include a security whose rating is below the minimum rating required.

The credit risk exposure in the investments portfolio at April 30 was as follows:

20092008
RatingPercentageRatingPercentage
Government Bonds
FranceAAA0.7%AAA1.3%
GermanyAAA13.2%AAA17.5%
JapanAA6.0%AA5.4%
SpainAA+0.1%
United KingdomAAA2.4%AAA3.1%
United StatesAAA14.6%AAA14.2%
Non-Government Bonds
Bank for International
SettlementsNot rated47.9%Not rated46.5%
Other International Financial
InstitutionsAAA10.8%AAA7.6%
Fixed-term Deposits and Other
Bank for International
SettlementsNot rated4.3%Not rated4.4%
100%100%

The General Department previously engaged its custodian in a securities lending program, in which marketable securities were lent temporarily to other institutions in exchange for a fee and collateral, to enhance the return on its investments. This program was suspended during the financial year ended April 30, 2009.

Market risk

Interest rate risk

Credit outstanding

Interest rate risk is the risk that future cash flows will fluctuate because of changes in market interest rates. Interest rate risk is managed through the use of a floating market interest rate (the SDR interest rate) to determine the rate of charge. The effect of interest rate fluctuations on lending income is minimized because the IMF links the rate of charge directly, by means of a fixed margin, to the cost of financing (which is equal to the SDR interest rate).

Investments

The investment portfolio is exposed to interest rate movements. The interest rate risk is mitigated by limiting the duration of the portfolio to a weighted average of 1–3 years.

A 50 basis point increase in the average effective yields of the IMF portfolio at April 30, 2009, would result in a loss of SDR 59.1 million or approximately 0.89 percent of the portfolio (SDR 56.3 million or 0.85 percent at April 30, 2008), whereas a 50 basis point decrease would result in a gain of SDR 60.0 million or approximately 0.91 percent of the portfolio (SDR 57.1 million or 0.87 percent at April 30, 2008).

Borrowing

Interest rate risk is limited since all drawings under existing borrowing agreements would normally be subject to the SDR interest rate. The proceeds from the borrowing are used to extend credit to member countries, at the rate of charge, or to repay borrowing under borrowing agreements. Under certain circumstances, higher interest rates can apply, in some cases requiring the agreement of the IMF.

Exchange rate risk

Financial assets and liabilities other than investments

Exchange rate risk is the exposure to the effects of fluctuations in foreign currency exchange rates on an entity’s financial position and cash flows. The IMF has no exchange rate risk exposure on its holdings of members’ currencies in the GRA since, under the Articles of Agreement, members are required to maintain the value of such holdings in terms of the SDR. Any depreciation/appreciation in a member’s currency vis-à-vis the SDR gives rise to a currency valuation adjustment receivable or payable that must be settled promptly after the end of the financial year or at other times as requested by the IMF or the member. The IMF has other assets and liabilities, such as accounts receivables and payables, denominated in currencies other than SDRs and makes administrative payments largely in U.S. dollars, but the exchange rate risk exposure from these other assets and liabilities is limited.

Investments

In accordance with current guidelines, exchange rate risk on investments is managed by investing in financial instruments denominated in SDRs or in constituent currencies of the SDR with the relative amount of each currency matching its weight in the SDR basket. In addition, the portfolio is regularly rebalanced to match the currency weights in the SDR basket.

The value of the SDR is the sum of the market values, in U.S. dollar equivalents, of the predetermined amounts of the four currencies in the SDR valuation basket. The effective share of each currency in the valuation of the SDR fluctuates daily and depends on the prevailing exchange rate in the London market at noon against the U.S. dollar on that day. Since the proportionate share of a currency in the SDR valuation basket is determined by reference to the market value against the U.S. dollar, the exchange risk can be measured indirectly using the exchange rate movements between that basket currency and the U.S. dollar. The net effect on the investment portfolio of a 10 percent increase in the market exchange rates of the basket currencies against the U.S. dollar, at April 30, would be as follows:

20092008
Net LossNet Gain
As a percent ofAs a percent of
investments notinvestments not
In millionsdenominatedIn millionsdenominated
of SDRsin SDRsof SDRsin SDRs
Euro(5.56)0.09%0.12<0.01%
Japanese Yen(3.14)0.05%1.490.02%
Pound Sterling(3.51)0.06%0.760.01%

The net effect of a 10 percent decrease in the market exchange rate of the basket currencies against the U.S. dollar, at April 30, would be as follows:

20092008
Net LossNet Gain
As a percent ofAs a percent of
investments notinvestments not
In millionsdenominatedIn millionsdenominated
of SDRsin SDRsof SDRsin SDRs
Euro(1.29)0.02%1.850.03%
Japanese Yen(3.81)0.06%0.500.01%
Pound Sterling(3.51)0.06%1.150.02%

Borrowing

The IMF has no exchange rate exposure on its borrowing arrangements since all drawings are denominated in SDRs.

Liquidity risk

Use of IMF resources

Liquidity risk is the risk to the IMF of nonavailability of resources to meet the financing needs of members and its own obligations. The IMF must have usable resources available to meet members’ demand for IMF financing. While the IMF’s resources are of a revolving nature, uncertainties in the timing and amount of credit extended to members during financial crises expose the IMF to liquidity risk. Moreover, the IMF must also stand ready to meet potential demands from members drawing upon their reserve tranche positions, which have no fixed maturity and are part of members’ reserves.

The IMF manages its liquidity risk not by matching the maturity of assets and liabilities, but by closely scrutinizing developments in its liquidity position. Long-term liquidity needs are addressed by reviewing the adequacy of quota-based resources. General reviews of members’ quotas are conducted at intervals of no more than five years in order to evaluate the adequacy of quota-based resources to meet members’ demand for IMF financing. The last general review was completed in January 2008.

Short-term liquidity needs for lending activities are reviewed and approved by the Executive Board on a quarterly basis through a financial transactions plan (FTP) for SDR amounts and member currencies to be used in transactions with members. The IMF also monitors its short-term liquidity position using objective criteria such as the forward-commitment capacity for the next 12-month period. (Schedule 2 provides the GRA’s available resources and liquidity position).

The IMF can also borrow to temporarily supplement its quota resources. The Executive Board has established guidelines on borrowing by the IMF to ensure that the financing of the IMF is managed in a prudent and systematic manner. The IMF currently maintains two standing borrowing arrangements—the New Arrangements to Borrow (NAB) and the General Arrangements to Borrow (GAB)—with a total borrowing capacity of SDR 34 billion.

In early 2009, the Executive Board reviewed the adequacy of the IMF’s resources to meet members’ demand for balance of payment support during the current global financial crisis. The Executive Board agreed on the need to boost the IMF’s lending capacity as part of the near-term response to the crisis. While quota subscriptions are and should remain the basic source of IMF financing, Directors agreed that IMF borrowing from the official sector provided the most appropriate avenue to supplement resources in the short-run. At its April 2009 summit, the G-20 committed to a tripling of the resources available to the IMF to US$750 billion. The International Monetary and Financial Committee reaffirmed these measures and agreed to complete the next review of quotas by January 2011. The Committee also endorsed an increase in the IMF’s resources through bilateral financing from members of US$250 billion. The borrowings would subsequently be incorporated into an expanded NAB, which would be increased by up to US$500 billion. The IMF has entered into loan agreements with the Government of Japan (for US$100 billion), the Norges Bank (SDR 3 billion) and the Government of Canada (US$10 billion, see Notes 13 and 20). The commitment for financing by other members would be fulfilled upon the completion of domestic and legislative actions.

Investments

Liquidity risk on investments is limited by investing a portion of the portfolios in readily marketable short- and medium-term financial instruments to meet anticipated liquidity needs.

Income risk

The IMF has been relying principally on income from charges levied on outstanding credit to meet its operating costs. At the same time, the level of IMF lending fluctuates significantly. In May 2006, the IMF’s Managing Director appointed a committee of well-known experts to study sustainable financing options for the IMF. The committee recommended that the IMF broaden its income sources to more closely align with the IMF’s diverse activities.

Based on the recommendations of the committee, the Executive Board proposed new and sustainable income and expenditure frameworks to close the projected income shortfall. Key elements of the new income model include establishing an endowment using the profits from the limited sale of 12.97 million ounces of gold holdings, expanding the investment authority to enhance the expected return on the IMF’s investments, and reinstating the practice of reimbursing the IMF for the cost of administering the PRGF-ESF Trust. The expenditure framework proposal includes significant expenditure cuts over the medium term. In May 2008, the IMF’s Board of Governors endorsed these proposals and adopted the related resolution on the amendment of the Articles of Agreement. The implementation of the income proposal will require legislative action in many member countries. The amendment will enter into effect after three-fifths of the members having 85 percent of the total voting power have accepted it. As of April 30, 2009, 17 members with 21 percent of the total voting power have consented to the proposed amendment.

Operational risk

Operational risk includes risk of loss attributable to errors or omissions because of failures in executing or processing transactions, inadequate controls, human factors, and/or failures in underlying support systems.

The IMF mitigates operational risk by (i) identifying key operational risks, (ii) maintaining a system of internal controls, (iii) documenting policies and procedures on administrative and accounting and reporting processes, and (iv) conducting internal audits to provide independent reviews of the effectiveness of the control processes and risk management. The design and effectiveness of controls are evaluated continuously and improvements are implemented on a timely basis. The results of the internal audits are reported by the Office of Internal Audit and Inspection both to the Managing Director and the External Audit Committee (EAC), which also exercises oversight over the external audit of the IMF’s accounts and its controls.

5. Currencies

Net changes in the IMF’s holdings of members’ currencies for the financial years ended April 30, 2009, and 2008 were as follows:

April 30,NetApril 30,NetApril 30,
2007change2008change2009
(In millions of SDRs)
Members’ quotas216,748625217,373217,373
Members’ outstanding use
of IMF credit in the GRA7,333(1,437)5,89614,53020,426
Members’ reserve tranche
positions in the GRA(14,996)1,514(13,482)(14,713)(28,195)
Administrative currency
balances5(1)4(1)3
Total currencies209,090701209,791(184)209,607

Receivables and payables arising from valuation adjustments at April 30, 2009, when all holdings of currencies of members were last revalued, amounted to SDR 16,359 million and SDR 6,990 million, respectively (SDR 7,127 million and SDR 7,091 million, respectively, at April 30, 2008). Settlements of these receivables and or payables are required to be made by or to members promptly after the end of each financial year.

6. Credit and loans outstanding

Credit outstanding in the GRA and SAF loans in the SDA are carried at amortized cost.

Changes in the outstanding use of IMF credit under the various facilities of the GRA were as follows:

April 30,Pur-Repur-April 30,Pur-Repur-April 30,
2007chaseschases2008chaseschases2009
(In millions of SDRs)
Credit tranches6,2051,122(2,342)4,98516,361(1,601)19,745
Extended Fund
Facility717346(387)6762(210)468
Enlarged access262(95)167(7)160
Compensatory and
Contingency
Financing Facility79(40)39(5)34
Supplementary
Financing Facility70(41)29(10)19
Total credit
outstanding7,3331,468(2,905)5,89616,363(1,833)20,426

Scheduled repurchases in the GRA and repayment of SAF loans in the SDA are summarized below:

GeneralSpecial
Financial yearResourcesDisbursement
ending April 30AccountAccount
(In millions of SDRs)
2010266
20111,914
20123,267
20138,457
20145,989
2015 and beyond233
Overdue3009
Total20,4269

Overdue obligations

During the financial year ended April 30, 2008, Liberia settled all of its overdue obligations to the General Department, including GRA credit outstanding and overdue charges of SDR 200 million and SDR 282 million, respectively. Settlement of the overdue charges generated burden-sharing refunds to members for amounts totaling SDR 230 million that were previously collected through burden-sharing adjustments to the rate of charge and remuneration (see Notes 11 and 16).

At April 30, 2009 and 2008, two members were six months or more overdue in settling their financial obligations to the General Department as follows:

GRA RepurchasesGRA Charges and
and SAF loansSAF interest
2009200820092008
(In millions of SDRs)
Total overdue309338826815
Overdue for six months or more309338821806
Overdue for three years or more309338776760

The type and duration of the overdue amounts in the General Department were as follows at April 30, 2009:

GRAGRALongest
RepurchasesCharges andTotaloverdue
and SAF loansSAF interestobligationobligation
(In millions of SDRs)
Somalia106115221July 1987
Sudan203711914July 1985
Total3098261,135

7. Investments

Investments are held in the Investment Account (SDR 6,498 million and SDR 6,482 million at April 30, 2009, and 2008, respectively) and the MDRI-I Trust (SDR 298 million and SDR 304 million at April 30, 2009, and 2008, respectively) and are managed by external investment managers. These investments comprise fixed-term deposits, short-term investments and fixed-income securities, none of which include asset-backed securities. Fixed income securities include domestic government bonds of the Euro area, Japan, the United Kingdom and the United States, and medium-term instruments issued by the Bank for International Settlements. The fair value of the short-term investments and fixed-income securities is based on the quoted marked prices or dealer quotes on the last business day of the financial year.

At April 30, investments consisted of the following:

20092008
(In millions of SDRs)
Short-term investments25473
Fixed-term deposits84284
Fixed-income securities6,4586,429
Total investments6,7966,786

The maturities of the investments were as follows:

Investments maturing in

financial year ending April 30
(In millions of SDRs)
2010926
20113,225
20122,434
2013157
2014 and beyond54
Total6,796

Investment income

Investment income amounted to SDR 372 million for the Investment Account and SDR 5 million for the MDRI-I Trust for the financial year ended April 30, 2009 (SDR 317 million and SDR 12 million, respectively, for the financial year ended April 30, 2008).

Investment income comprised the following for the financial years ended April 30:

20092008
(In millions of SDRs)
Interest income202224
Realized gains13035
Realized losses(23)(5)
Unrealized gains173171
Unrealized losses(105)(96)
Total377329

8. Gold holdings

The IMF acquired the majority of its gold holdings from quota subscriptions and financial transactions prior to the Second Amendment of the Articles of Agreement (April 1, 1978). The IMF also acquired gold through the settlement of obligations by members in 1992 and 1999/2000. The Articles of Agreement limit the use of gold in the IMF’s operations and transactions. Any transactions in gold provided for in the Articles require a decision adopted by an 85 percent majority of the total voting power. Under the Articles, the IMF may sell gold outright on the basis of prevailing market prices but cannot engage in any other gold transactions, such as loans, leases, swaps, or the use of gold as collateral. In addition, the IMF does not have the authority to buy gold, but it may accept payments from a member in gold instead of SDRs or currencies in any operation or transaction at the prevailing market prices.

At April 30, 2009, and 2008, the IMF held 3,217,341 kilograms of gold, equal to 103.4 million fine ounces of gold, at designated depositories. Gold holdings were valued at a historical cost of SDR 5,852 million at April 30, 2009, and 2008.

Cost
OuncesPer ounceTotal
(In millions
(In millions)(In SDRs)of SDRs)
Gold acquired from quota subscriptions90.474353,167
Gold acquired from Cambodia in 1992.0212415
Gold acquired through off-market transactions in 199912.9442072,680
Total103.4395,852

At April 30, 2009, the market value of the IMF’s holdings of gold was SDR 61.0 billion (SDR 55.5 billion at April 30, 2008).

9. Other assets—fixed assets

Other assets include fixed assets, which at April 30, 2009, and 2008 amounted to SDR 294 million and SDR 296 million, respectively, and consisted of land, buildings and equipment, furniture, and software.

LandBuildingsOtherTotal
(In millions of SDRs)
Cost
Beginning of year9629898492
Additions41822
Disposals
End of year96302116514
Accumulated depreciation and
amortization
Beginning of year14254196
Additions101424
Disposals
End of year15268220
Net book value at April 30, 20099615048294
Net book value at April 30, 20089615644296

10. HIPC Initiative and Multilateral Debt Relief Initiative

Under the MDRI, effective January 5, 2006, debt relief is provided to qualifying Heavily Indebted Poor Countries (HIPCs) and non-HIPCs with annual per capita income of US$380 or less, and to qualifying HIPCs with an annual per capita income of more than US$380. Grant assistance from the MDRI Trusts (together with assistance under the HIPC Initiative) provides debt relief to cover the debt owed to the IMF at December 31, 2004, that remains outstanding at the time the member qualifies for such relief. For the financial years ended April 30, 2009, and 2008, the MDRI-I Trust disbursed SDR 9 million and SDR 7 million in grant assistance, respectively, allowing for early repayment of outstanding loans in the PRGF-ESF Trust.

Since the debt owed to the IMF at December 31, 2004, decreases over time, the actual amount of debt eligible for MDRI assistance for the remaining qualifying HIPCs depends on the timing of their completion points. The IMF periodically reviews the qualification of members for HIPC and MDRI debt relief as these members make progress toward reaching the completion point under the HIPC Initiative.

MDRI grant assistance to the remaining eligible members is subject to the availability of resources and is accrued when it is probable that a liability has been incurred and the amount of such grant assistance needed can be reasonably estimated. The liability recorded in the MDRI-I Trust amounted to SDR 102 million and SDR 189 million at April 30, 2009, and 2008, respectively, and is based on the evaluation of available facts at the end of the reporting period with respect to each individual eligible member. It includes factors such as progress made toward reaching the completion point under the HIPC Initiative and the capacity to meet the macroeconomic performance and other objective criteria after reaching the completion point. As the qualification of members for MDRI debt relief is assessed, the amounts recorded are reviewed periodically and adjusted to reflect additional information that becomes available. During the financial years ended April 30, 2009 and 2008, the estimate for MDRI grant assistance to be provided by the MDRI-I Trust was reduced by SDR 80 million and 108 million, respectively, to reflect the delay by the remaining eligible members in reaching the completion point.

The reconciliation of accrued MDRI grant assistance for the MDRI-I Trust for the years ended April 30, is as follows:

20092008
(In millions of SDRs)
Beginning of year189299
Additions25
Amounts utilized(9)(7)
Reversals(80)(108)
End of year102189

11. Interest and charges

At April 30, 2009, the credit outstanding on which the IMF levies charges amounted to SDR 20,426 million (SDR 5,896 million at April 30, 2008). For the financial years ended April 30, 2009, and 2008, the basic rate of charge was set at a fixed margin of 100 basis points above the SDR interest rate. The average rate of charge (adjusted for burden sharing) before applicable surcharges for the financial year ended April 30, 2009, was 2.84 percent (4.90 percent for the financial year ended April 30, 2008).

Interest and charges receivables at April 30 were as follows:

20092008
(In millions of SDRs)
Periodic charges920878
Amount paid through burden-sharing(692)(683)
Unpaid charges(134)(134)
9461
Interest receivable315
Total interest and charges receivables9776

Interest and periodic charges consisted of the following for the years ended April 30:

20092008
(In millions of SDRs)
Interest and periodic charges363615
Burden-sharing adjustments412
Burden-sharing refunds(115)
Total interest and charges367512

Interest earned on SAF loans for the financial years ended April 30, 2009, and 2008 amounted to less than SDR 0.05 million each year.

Service charges and commitment fees on canceled or expired arrangements amounted to SDR 85 million and SDR 10 million for the years ended April 30, 2009, and 2008, respectively, and are included in other charges and income.

12. Special Disbursement Account

Contributions to Administered Accounts

Assets in the SDA can be used for special purposes authorized in the Articles of Agreement, including providing financial assistance on special terms to developing member countries.

Proceeds from the repayment of SAF loans and Trust Fund loans and excess resources from the Supplementary Financing Facility Subsidy Account are transferred from the SDA to the Reserve Account of the PRGF-ESF Trust as contributions. During the financial year ended April 30, 2009, SDR 0.02 million in Trust Fund loan repayments (SDR 31 million for the financial year ended April 30, 2008) were contributed to the PRGF-ESF Trust.

Trust Fund

The IMF is the Trustee of the Trust Fund, which was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualified for such assistance. The Trust Fund is in liquidation following its termination in 1981. Since that date, the activities of the Trust Fund have been confined to the conclusion of its affairs. Liberia repaid SDR 31 million in overdue Trust Fund loans during the year ended April 30, 2008. The Trust Fund has no assets other than loans and interest receivable from Somalia and Sudan amounting to SDR 88 million at April 30, 2009 and 2008, respectively. All interest income is deferred. Proceeds from the repayment of these loans are transferred to the SDA for onward transfer to the Reserve Account of the PRGF-ESF Trust.

13. Borrowings

Under the GAB and an associated agreement with Saudi Arabia, the IMF may borrow up to SDR 18.5 billion when supplementary resources are needed, in particular, to forestall or to cope with an impairment of the international monetary system. The GAB became effective on October 24, 1962, and has been renewed through December 26, 2013. Interest on borrowings under the GAB is set at the SDR interest rate.

Under the NAB, the IMF may borrow up to SDR 34 billion in supplementary resources. The NAB is the facility of first and principal recourse, but it does not replace the GAB, which remains in force. Outstanding drawings and commitments under these two borrowing arrangements are limited to a combined total of SDR 34 billion. The NAB became effective on November 17, 1998, and has been renewed through November 17, 2013. Interest on borrowings under the NAB is payable to the participants at the SDR interest rate or any such higher rate as may be agreed between the IMF and participants representing 80 percent of the total credit arrangements. There were no outstanding borrowings under the GAB or the NAB at April 30, 2009, and 2008.

To temporarily supplement its financial resources, the IMF entered into a loan agreement with the Government of Japan in February 2009. The agreement became effective on May 1, 2009, has an initial term of one year, and can be extended for up to five years. The IMF may borrow up to $100 billion (equivalent to SDR 67 billion), and drawings under the agreement are to be denominated in SDR and will carry interest at the SDR interest rate. Outstanding drawings are repayable in three months but the maturity can be unilaterally extended by the IMF for additional three-month periods for a total maturity period of up to five years.

There were no outstanding borrowings at April 30, 2009.

14. Arrangements

An arrangement is a decision of the IMF that gives a member the assurance that the IMF stands ready to provide SDRs or usable currencies during a specified period and up to a specified amount, in accordance with the agreed terms. At April 30, 2009, the undrawn balances under the 16 arrangements that were in effect in the GRA amounted to SDR 51,775 million (SDR 3,086 million under nine arrangements at April 30, 2008). See Schedule 3. In May 2009, the IMF approved one-year arrangements for Poland (for SDR 13,690 million) and Colombia (SDR 6,966 million) under the Flexible Credit Line.

15. Burden sharing and the Special Contingent Account

Under the burden-sharing mechanism, the basic rate of charge is increased and the rate of remuneration is reduced to offset the effect on the IMF’s income of the nonpayment of charges and also to finance additions to the SCA-1. Since November 1, 2006, the accumulation of further balances in the SCA-1 has been suspended.

Cumulative charges, net of settlements, that have resulted in adjustments to charges and remuneration since May 1, 1986 (the date the burden-sharing mechanism was adopted) amounted to SDR 692 million at April 30, 2009 (SDR 683 million at April 30, 2008). The cumulative refunds for the same period, resulting from the settlements of overdue charges for which burden-sharing adjustments have been made, amounted to SDR 1,320 million at April 30, 2009, and 2008.

Balances in the SCA-1 are to be distributed to the members that contributed towards the SCA-1 when there are no longer any outstanding overdue repurchases and charges, or at such earlier time as the IMF may decide. Amounts collected from members for the SCA-1 are akin to refundable cash deposits and are recorded as collections of cash and as a liability to those who paid them. Losses arising from overdue obligations, if realized, would be shared by members in proportion to their cumulative contributions to the SCA-1. No additions have been made to the SCA-1 during the financial year ended April 30, 2009, and 2008. There were no distributions to contributing members during the financial year ended April 30, 2009 (a partial distribution of SDR 525 million was made to contributing members during the financial year ended April 30, 2008).

16. Remuneration

At April 30, 2009, total creditor positions on which the IMF paid remuneration amounted to SDR 21,301 million (SDR 6,598 million at April 30, 2008). The average rate of remuneration (adjusted for burden-sharing) for the financial year ended April 30, 2009, was 1.74 percent (3.47 percent for the financial year ended April 30, 2008). Remuneration consisted of the following for the years ended April 30:

20092008
(In millions of SDRs)
Remuneration179271
Burden-sharing adjustments(4)(12)
Burden-sharing refunds116
175375

17. Administrative expenses

Administrative expenses, the majority of which were incurred in U.S. dollars, were as follows for the years ended April 30:

20092008
(In millions of SDRs)
Personnel341351
Pension and other long-term employee benefits46117
Travel5262
Other8683
Restructuring768
Total administrative expenses, net of
reimbursements532681

During the financial year ended April 30, 2008, the IMF embarked on an institutional restructuring plan that involved voluntary staff separations. At April 30, 2008, a provision of SDR 68 million was made for expected severance and other termination benefits for separating staff, as well as outplacement and other direct costs.

During the year ended April 30, 2009, costs related to separating staff amounting to SDR 20 million were charged against the provision. The provision for restructuring cost was increased by SDR 7 million to reflect the effects of changes in the SDR/U.S. dollar exchange rate, and the latest estimate on benefit payments and outplacement costs.

The reconciliation of the provision was as follows for the years ended April 30:

20092008
(In millions of SDRs)
Beginning of year68
Additions768
Amounts utilized(20)
End of year5568

18. Pension and other postretirement benefits

The IMF has a defined benefit Staff Retirement Plan (SRP) that covers substantially all eligible staff and a Supplemental Retirement Benefits Plan (SRBP) for selected participants of the SRP. Participants contribute 7 percent of their pensionable gross remuneration, and the IMF contributes the remainder of the cost of funding the Plans. In addition, the IMF provides other employment and postretirement benefits, including medical, life insurance, and other long-term benefits. In 1995, the IMF established a separate account, the Retired Staff Benefits Investment Account (RSBIA), to hold and invest resources set aside to fund the cost of postretirement benefits.

The defined benefit obligations are valued annually by independent actuaries using the Projected Unit Credit Method. The actuarial valuations carried out at April 30, 2009, include the amortization of prior service costs (SDR 3 million) and the effect of an amendment to the Medical Benefits Plans, effective September 1, 2008. This amendment resulted in the recognition of an additional SDR 32 million of prior service cost during the financial year ended April 30, 2009, for benefits that are vested immediately. The actuarial valuation at April 30, 2008, included the effect amounting to SDR 33 million of an amendment to the SRP to provide an additional option for eligible staff to receive pension benefits at the early retirement age of 50. In addition, the staff benefits and postretirement benefits for the financial year ended April 30, 2008, included a curtailment charge of SDR 7 million and accelerated service cost of SDR 21 million as a result of institutional restructuring.

The amounts recognized in the statements of financial position for the SRP, the SRBP and other employee benefits for the financial years ended April 30 are determined as follows:

20092008
SRPSRBPOtherTotalTotal
(In millions of SDRs)
Fair value of plan assets3,420114083,8394,940
Present value of the defined
benefit obligation(3,153)(410)(805)(4,368)(4,000)
Unrecognized actuarial
losses/(gains)70942105856(652)
Unrecognized prior service cost242416
Net balance sheets asset/
(liability)976(357)(268)351304

The IMF expects to contribute SDR 129 million to its defined benefit pension plans during the financial year ending April 30, 2010.

The reconciliation of the defined benefit obligation for the financial years ended April 30 is as follows:

20092008
SRPSRBPOtherTotalTotal
(In millions of SDRs)
Defined benefit obligation at
beginning of year3,0193796024,0004,201
Current service cost642942135177
Interest cost1972640263254
Staff contributions2512626
Benefits paid(106)(11)(46)(163)(146)
Prior service cost (plan
amendment)414144
Curtailment and accelerated
service cost (restructuring)28
Actuarial (gains)/losses(318)(50)70(298)(303)
Exchange differences2723656364(281)
Defined benefit obligation at
end of year3,1534108054,3684,000

The amounts recognized in the statements of comprehensive income for the financial years ended April 30 are as follows:

20092008
SRPSRBPOtherTotalTotal
(In millions of SDRs)
Current service cost642942135177
Interest cost1972640263254
Expected return on assets(329)(1)(39)(369)(370)
Amortization of actuarial
(gains)/losses(10)2(10)(18)(5)
Prior service cost (plan
amendment)353533
Curtailment and accelerated
service cost (restructuring)28
Total (income)/expense
recognized in the statement
of comprehensive income(78)566846117
Actual return on assets(1,412)349

The pension and other postretirement benefits expenses recognized in the statement of comprehensive income include the amortization, over the estimated average remaining service lives of IMF staff, of actuarial gains and losses in excess of a corridor that is the larger of 10 percent of either the defined benefit obligation or the fair value of assets at the beginning of the financial year.

The reconciliation of changes in fair value of assets for the financial years ended April 30 is as follows:

20092008
SRPSRBPOtherTotalTotal
(In millions of SDRs)
Fair value of assets at the
beginning of year4,409135184,9404,928
Expected return on assets329139369370
Losses on assets(1,602)(1)(179)(1,782)(21)
Employer contributions477399396
Staff contributions2512626
Benefits paid(106)(11)(46)(163)(146)
Exchange differences318137356(313)
Actual fair value of assets at
end of year3,420114083,8394,940

The funded status and the experience adjustments for the current and previous four financial years are as follows:

20092008200720062005
(In millions of SDRs)
Defined benefit obligation(4,368)(4,000)(4,201)(3,834)(3,720)
Plan assets3,8394,9404,9284,4683,504
(Deficit)/surplus in the Plans(529)940727634(216)
Experience adjustments on:
Plan liabilities299(303)(195)312(45)
Plan assets(1,782)(20)287593136
Exchange rates(9)(33)(19)(17)25

The major categories of plan assets as a percentage of the total value of plan assets at April 30 were as follows:

20092008
(In percentage)
Cash5.26.1
Fixed income18.915.4
Equity44.849.6
Real estate3.03.8
Private equity and other28.125.1
100.0100.0

The principal actuarial assumptions used in the actuarial valuations for the financial years ended April 30 were as follows:

20092008
(In percentage)
Discount rate7.256.50
Expected return on plan assets7.507.50
Future salary increases6.40-10.86.40-10.8
Health-care trend rate5.00-11.754.00-8.50

The expected return on plan assets is set by reference to historical returns on each of the main asset classes, current market indicators such as long-term bond yields, and the expected long-term strategic asset allocation of each plan.

The effects of the assumed health care costs growth rates on the defined benefit plans are as follows:

Increase of

1 percentage point
Decrease of

1 percentage point
(In millions of SDRs)
Effect on the aggregate of the service cost and interest cost11(9)
Effect on defined benefit obligation123(98)

19. Related party transactions

The General Department conducts its transactions with the SDR Department on the same terms and conditions applicable to participants in the SDR Department. The expenses of conducting the SDR Department, the SRP, the RSBIA, and other accounts administered by the IMF as Trustee are borne by the GRA. Effective in FY 2009, administrative expenses of the SRP and RSBIA are reimbursed to the GRA. In addition, reimbursements are made by the SDR Department and some, but not all, of the administered accounts.

The following summarizes the inter-entity balances at April 30, 2009, and 2008, and the related party transactions for the financial years then ended:

20092008
(In millions of SDRs)
SDR Department Administrative expenses
(reimbursed)22
PRGF-ESF Trust Cumulative SDA transfers to the:
Reserve Account2,8932,893
Subsidy Accounts870870
Administrative expenses (reimbursements
forgone)4143
PRGF-HIPC Trust Cumulative transfers from
the SDA1,2391,239
SRP and RSBIA Administrative expenses
(reimbursed)2

20. Subsequent Events

In May 2009, the IMF entered into a loan agreement with Norges Bank to borrow up to SDR 3 billion for a period of one year. Outstanding borrowings, denominated in SDRs and with interest payable at the SDR interest rate, are repayable in three months but may be renewed at the IMF’s option for a period of up to 5 years. In June 2009, the IMF also entered into a loan agreement with similar terms for US $10 billion for a period of two years with the Government of Canada.

On June 29, 2009, the Republic of Kosovo became a member of the IMF.

Schedule 1

General Department: Quotas, IMF’s holdings of currencies, reserve tranche positions, and outstanding credit and loans as at April 30, 2009

(In millions of SDRs)

General Resources Account
IMF’s holdingsOutstanding credit and loans
of currencies1ReserveGRAPRGF-ESF
PercenttrancheAmount2Percent2SDA3Trust4Total5
MemberQuotaTotalof quotaposition(A)+(B)+(C)=(D)
Afghanistan, Islamic Republic of161.9161.9100.069.769.7
Albania48.753.9110.63.48.50.0442.651.2
Algeria1,254.71,169.693.285.1
Angola286.3286.4100.1
Antigua and Barbuda13.513.5100.00.06
Argentina2,117.12,116.9100.00.2
Armenia92.0253.6275.6161.60.7982.4244.0
Australia3,236.42,815.287.0421.7
Austria1,872.31,596.685.3275.7
Azerbaijan160.9161.7100.50.10.946.847.6
Bahamas, The130.3124.095.26.3
Bahrain135.063.847.371.2
Bangladesh533.3666.3124.90.3133.30.65311.8445.1
Barbados67.561.891.65.7
Belarus386.4904.2234.00.06517.82.53517.8
Belgium4,605.23,854.283.7751.0
Belize18.819.3102.54.24.70.024.7
Benin61.959.796.52.214.614.6
Bhutan6.35.383.81.0
Bolivia171.5162.694.88.9
Bosnia and Herzegovina169.1169.1100.00.06
Botswana63.054.586.68.5
Brazil3,036.13,035.9100.00.3
Brunei Darussalam215.2201.793.713.7
Bulgaria640.2606.694.833.6
Burkina Faso60.252.887.77.435.335.3
Burundi77.076.699.50.451.451.4
Cambodia87.587.5100.0
Cameroon185.7184.999.60.818.618.6
Canada6,369.25,332.783.71,036.5
Cape Verde9.69.699.90.067.87.8
Central African Republic55.755.599.70.239.339.3
Chad56.055.799.50.323.023.0
Chile856.1747.787.3108.4
China8,090.16,811.284.21,279.0
Colombia774.0488.263.1285.8
Comoros8.99.5106.40.51.10.012.23.3
Congo, Democratic Republic of533.0533.0100.0552.7552.7
Congo, Republic of84.684.099.30.624.824.8
Costa Rica164.1144.187.820.0
Côte d’Ivoire325.2324.499.80.8194.5194.5
Croatia365.1364.9100.00.2
Cyprus139.6122.287.517.5
Czech Republic819.3715.387.3104.0
Denmark1,642.81,376.383.8266.5
Djibouti15.914.893.11.110.810.8
Dominica8.210.2124.90.062.10.017.79.7
Dominican Republic218.9507.8232.00.06288.91.41288.9
Ecuador302.3285.194.317.2
Egypt943.7943.7100.0
El Salvador171.3171.3100.0
Equatorial Guinea32.632.6100.0
Eritrea15.915.9100.00.06
Estonia65.265.2100.00.06
Ethiopia133.7126.394.47.533.433.4
Fiji70.354.477.415.9
Finland1,263.81,103.887.3160.1
France10,738.59,080.784.61,657.9
Gabon154.3153.899.70.5
Gambia, The31.129.695.21.513.113.1
Georgia150.3438.2291.60.06287.91.41129.7417.6
Germany13,008.211,351.887.31,656.4
Ghana369.0369.0100.00.06105.5105.5
Greece823.0718.387.3104.8
Grenada11.712.8109.41.10.017.08.0
Guatemala210.2210.2100.0
Guinea107.1107.099.90.144.644.6
Guinea-Bissau14.217.7124.60.13.60.022.05.6
Guyana90.990.9100.037.137.1
Haiti81.981.899.90.191.391.3
Honduras129.5120.993.38.620.320.3
Hungary1,038.47,287.1701.873.86,322.530.956,322.5
Iceland117.6659.0560.418.6560.02.74560.0
India4,158.23,544.385.2614.0
Indonesia2,079.31,933.893.0145.5
Iran, Islamic Republic of1,497.21,497.2100.00.06
Iraq1,188.41,017.385.6171.1
Ireland838.4732.187.3106.3
Israel928.2813.987.7114.3
Italy7,055.55,907.183.71,148.4
Jamaica273.5273.5100.0
Japan13,312.811,187.584.02,126.0
Jordan170.5180.0105.60.39.80.059.8
Kazakhstan365.7365.7100.00.06
Kenya271.4258.595.312.9160.1160.1
Kiribati5.65.6100.00.06
Korea, Republic of2,927.32,553.987.2373.4
Kuwait1,381.11,207.387.4173.8
Kyrgyz Republic88.888.8100.00.06100.1100.1
Lao People’s Democratic Republic52.952.9100.011.811.8
Latvia126.8662.1522.20.1535.32.62535.3
Lebanon203.0260.3128.218.876.10.3776.1
Lesotho34.931.389.73.617.917.9
Liberia129.2471.9365.30.06342.81.68214.3557.0
Libya1,123.7728.264.8395.5
Lithuania144.2144.2100.00.06
Luxembourg279.1234.083.945.1
Macedonia, former Yugoslav
Republic of68.968.9100.0
Madagascar122.2122.2100.00.0664.464.4
Malawi69.467.196.62.380.980.9
Malaysia1,486.61,246.483.8240.2
Maldives8.28.7106.11.62.10.012.1
Mali93.383.589.59.926.026.0
Malta102.061.760.540.3
Marshall Islands3.53.5100.00.06
Mauritania64.464.4100.010.310.3
Mauritius101.688.487.113.2
Mexico3,152.82,649.884.0503.1
Micronesia, Federated States of5.15.1100.00.06
Moldova123.2125.3101.70.062.10.01101.9103.9
Mongolia51.1102.1199.70.151.10.2511.162.2
Montenegro27.520.976.06.6
Morocco588.2517.888.070.4
Mozambique113.6113.6100.00.069.79.7
Myanmar258.4258.4100.0
Namibia136.5136.4100.00.1
Nepal71.371.3100.049.949.9
Netherlands5,162.44,331.383.9831.2
New Zealand894.6780.987.3113.7
Nicaragua130.0130.0100.072.172.1
Niger65.857.286.98.632.932.9
Nigeria1,753.21,753.1100.00.1
Norway1,671.71,396.983.6274.8
Oman194.0180.493.013.6
Pakistan1,033.73,672.7355.30.12,639.112.92723.63,362.7
Palau3.13.1100.00.06
Panama206.6194.894.311.9
Papua New Guinea131.6131.299.70.4
Paraguay99.978.478.521.5
Peru638.4638.4100.0
Philippines879.9792.290.087.7
Poland1,369.01,171.285.6197.8
Portugal867.4752.386.7115.1
Qatar263.8230.587.433.3
Romania1,030.21,030.2100.0
Russian Federation5,945.45,151.486.6794.0
Rwanda80.180.1100.08.68.6
St. Kitts and Nevis8.98.899.10.1
St. Lucia15.315.3100.00.06
St. Vincent and the Grenadines8.37.894.00.5
Samoa11.610.994.10.7
San Marino17.012.975.94.1
São Tomé and Príncipe7.47.4100.02.82.8
Saudi Arabia6,985.55,848.983.71,136.6
Senegal161.8160.199.01.741.641.6
Serbia467.7467.7100.0
Seychelles8.815.8180.00.067.00.037.0
Sierra Leone103.7103.7100.00.0634.534.5
Singapore862.5721.583.7141.2
Slovak Republic357.5311.587.146.0
Slovenia231.7201.687.030.1
Solomon Islands10.49.994.70.6
Somalia44.2140.9318.896.70.478.8112.0
South Africa1,868.51,867.199.91.4
Spain3,048.92,553.383.7495.60.01
Sri Lanka413.4425.9103.047.960.30.3030.791.0
Sudan169.7373.0219.80.06203.31.00262.5
Suriname92.186.093.46.1
Swaziland50.744.187.16.6
Sweden2,395.52,002.883.6392.7
Switzerland3,458.52,992.286.5466.4
Syrian Arab Republic293.6293.6100.00.06
Tajikistan87.087.0100.00.06
Tanzania198.9188.995.010.011.211.2
Thailand1,081.9907.883.9174.1
Timor-Leste8.28.2100.00.06
Togo73.473.199.50.331.231.2
Tonga6.95.275.21.7
Trinidad and Tobago335.6280.983.754.7
Tunisia286.5266.392.920.2
Turkey1,191.36,154.9516.7112.85,076.324.855,076.3
Turkmenistan75.275.2100.00.06
Uganda180.5180.5100.06.06.0
Ukraine1,372.04,401.6320.80.063,029.614.833,029.6
United Arab Emirates611.7533.987.378.4
United Kingdom10,738.58,993.683.81,745.0
United States37,149.331,639.985.25,508.3
Uruguay306.5306.5100.0
Uzbekistan275.6275.6100.00.06
Vanuatu17.014.585.32.5
Venezuela, República Bolivariana de2,659.12,337.287.9321.9
Vietnam329.1329.1100.00.0670.470.4
Yemen, Republic of243.5244.4100.40.060.945.045.9
Zambia489.1489.1100.00.0662.062.0
Zimbabwe353.4353.199.90.373.873.8
Total217,372.7209,607.628,195.120,426.5100.08.84,124.524,625.5
The ending balances include rounding differences

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies, and outstanding currency valuation adjustments.

Represents the percentage of total use of GRA resources (column A).

The Special Disbursement Account (SDA) of the General Department had financed loans under Structural Adjustment Facility (SAF) and Poverty Reduction Growth Facility (PRGF) arrangements.

For information purposes only. The PRGF-ESF Trust provides financing under PRGF arrangements and is not a part of the General Department.

Includes outstanding Trust Fund loans to Somalia (SDR 6.5 million) and Sudan (SDR 59.2 million).

Less than SDR 50,000.

The ending balances include rounding differences

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies, and outstanding currency valuation adjustments.

Represents the percentage of total use of GRA resources (column A).

The Special Disbursement Account (SDA) of the General Department had financed loans under Structural Adjustment Facility (SAF) and Poverty Reduction Growth Facility (PRGF) arrangements.

For information purposes only. The PRGF-ESF Trust provides financing under PRGF arrangements and is not a part of the General Department.

Includes outstanding Trust Fund loans to Somalia (SDR 6.5 million) and Sudan (SDR 59.2 million).

Less than SDR 50,000.

Schedule 2

General Department: Financial resources and liquidity position in the General Resources Account at April 30, 2009, and 2008

(In millions of SDRs)

20092008
Total resources
Currencies209,607209,791
SDR holdings2,1331,852
Gold holdings5,8525,852
Other assets16,8756,816
Total resources224,467224,311
Less: Non-usable resources270,35259,386
of which: Credit Outstanding20,4265,896
Equals: Usable resources3154,115164,925
Less: Undrawn balances under GRA arrangements51,7753,086
Equals: Uncommitted usable resources102,340161,839
Plus: Repurchases one year forward4266222
Less: Prudential balance535,73334,879
Equals: One year forward commitment capacity (FCC)66,873127,182
Memorandum items
Resources available under borrowing arrangements101,00034,000
Quotas of members that finance IMF transactions178,664174,394
Liquid liabilities28,19513,482

Other assets reflect current assets (charges, interest, and other receivables) and other assets (which include capital assets such as land, buildings, and equipment), net of other liabilities including remuneration payable.

Resources regarded as nonusable if they cannot be used in the financing of the IMF’s ongoing operations and transactions. These resources include (1) gold holdings, (2) currencies of members that are using IMF credit, (3) currencies of other members with relatively weak external positions, and (4) other assets.

Usable resources consist of (1) holdings of currencies of members considered by the IMF as having balance of payments and reserve positions sufficiently strong for their currencies to be used in transfers, (2) SDR holdings, and (3) any unused amounts under credit lines that have been activated.

Repurchases by member countries during the coming one-year period.

Prudential balance is set at 20 percent of quotas of members whose currencies are used in the financing of IMF transactions and any amounts activated under borrowing arrangements.

Other assets reflect current assets (charges, interest, and other receivables) and other assets (which include capital assets such as land, buildings, and equipment), net of other liabilities including remuneration payable.

Resources regarded as nonusable if they cannot be used in the financing of the IMF’s ongoing operations and transactions. These resources include (1) gold holdings, (2) currencies of members that are using IMF credit, (3) currencies of other members with relatively weak external positions, and (4) other assets.

Usable resources consist of (1) holdings of currencies of members considered by the IMF as having balance of payments and reserve positions sufficiently strong for their currencies to be used in transfers, (2) SDR holdings, and (3) any unused amounts under credit lines that have been activated.

Repurchases by member countries during the coming one-year period.

Prudential balance is set at 20 percent of quotas of members whose currencies are used in the financing of IMF transactions and any amounts activated under borrowing arrangements.

Schedule 3

General Department: Status of arrangements in the General Resources Account at April 30, 2009

(In millions of SDRs)

AmountUndrawn
MemberDate of arrangementExpirationagreedbalance
Stand-By Arrangements
ArmeniaMarch 6, 2009July 5, 2011368206
BelarusJanuary 12, 2009April 11, 20101,6181,100
Costa RicaApril 11, 2009July 10, 2010492492
El SalvadorJanuary 16, 2009March 31, 2010514514
GabonMay 7, 2007May 6, 20107777
GeorgiaSeptember 15, 2008March 14, 2010477189
GuatemalaApril 22, 2009October 21, 2010631631
HungaryNovember 6, 2008April 5, 201010,5384,215
IcelandNovember 19, 2008November 18, 20101,400840
LatviaDecember 23, 2008March 22, 20111,522986
MongoliaApril 1, 2009October 1, 2010153102
PakistanNovember 24, 2008October 23, 20105,1692,533
SerbiaJanuary 16, 2009April 15, 2010351351
SeychellesNovember 14, 2008November 13, 20101811
UkraineNovember 5, 2008November 4, 201011,0008,000
Total Stand-by Arrangements34,32820,247
Flexible Credit Line
MexicoApril 17, 2009April 16, 201031,52831,528
Total Flexible Credit Line31,52831,528
Total General Resources Account65,85651,775

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