Chapter

APPENDIX IX. Some Decisions Of The Executive Board Relating To The Use Of The Fund’s Resources

Author(s):
International Monetary Fund
Published Date:
September 1948
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Executive Board Decision No. 284-2

Subject: Use of the Fund’s Resources—Postponement Under Article XX, Section 4(i)

The Fund has, in the case of a member which has had no previous exchange transaction with the Fund, the power to postpone exchange transactions with it if its circumstances are such that, in the opinion of the Fund, they would lead to the use of the resources of the Fund in a manner contrary to the purposes of the Agreement or prejudicial to the Fund or its members. This power did not lapse as of the date the Fund began exchange transactions. (Executive Board Meeting No. 284, March 10, 1948.)

Executive Board Decision No. 284-3

Subject: Use of the Fund’s Resources—Limitation and Ineli-gibility Under Article V, Section 5

The Fund has, in the case of a member which has had a previous exchange transaction with the Fund, power to declare the member ineligible or limit its use of the resources of the Fund if the member is, in the opinion of the Fund, using the resources of the Fund in a manner contrary to the purposes of the Fund. (Executive Board Meeting No. 284, March 10, 1948.)

Executive Board Decision No. 284-4

Subject: Use of the Fund’s Resources—Meaning of Article V, Section 3 (a) (i)

The word “represents” in Article V, Section 3 (a) (i), means “declares”. The member is presumed to have fulfilled the condition mentioned in Article V, Section 3(a)(i), if it declares that the currency is presently needed for making payments in that currency which are consistent with the provisions of the Agreement. But the Fund may, for good reasons, challenge the correctness of this declaration, on the grounds that the currency is not “presently needed”, or because the currency is not needed for payment “in that currency”, or because the payments will not be “consistent with the provisions of this Agreement”. If the Fund concludes that a particular declaration is not correct, the Fund may postpone or reject the request, or accept it subject to conditions. The phrase “presently needed” cannot be defined in terms of a formula uniformly applicable to all cases, but where there is good reason to doubt that the currency is “presently needed”, the Fund will have to apply the phrase in each case in the light of all the circumstances. (Executive Board Meeting No. 284, March 10, 1948.)

Executive Board Decision No. 284-5

Subject: Use of the Fund’s Resources—Postponement Under Article XX, Section 4(i)

The power of the Fund to postpone exchange transactions with any member under Article XX, Section 4(i) does not continue in force with respect to a member after the member has purchased the currency of another member from the Fund in accordance with Article V, Section 3. (Executive Board Meeting No. 284, March 10, 1948.)

Executive Board Decision No. 286-1

Subject: Use of the Fund’s Resources—Postponement and Limitation Under Article V, Section 5

If the Fund receives a request from a member to purchase exchange and either, (1) the Fund is considering sending the member a report pursuant to Article V, Section 5, or (2) the Fund finds when the request is before it that action pursuant to that Section should be considered; then the Fund has the authority, pursuant to Article V, Section 5 of the Fund Agreement, to postpone the transfer as permitted under the provisions of Rules and Regulations G-3 for such time as may reasonably be necessary to decide the question of applying Article V, Section 5 and, if it decides to apply it, to prepare and send to the member a report and subject its use of the Fund’s resources to limitations. Under such circumstances the limitations imposed will apply to the pending request for the purchase of exchange as well as to future requests. (Executive Board Meeting No. 286, March 15, 1948.)

Executive Board Decision No. 287-3

Subject: Use of the Fund’s Resources—Meaning of “Consistent with the Provisions of this Agreement” in Article V, Section 3

The phrase “consistent with the provisions of this Agreement” in Article V, Section 3, means consistent both with the provisions of the Fund Agreement other than Article I and with the purposes of the Fund contained in Article I. (Executive Board Meeting No. 287, March 17, 1948.)

Executive Board Decision No. 292-3

Subject: Use of the Fund’s Resources—Meaning of “Is Using” in Article V, Section 5

A member “is using” the resources of the Fund within the meaning of Article V, Section 5, where it is either actually disposing of the exchange purchased from the Fund, or, having purchased exchange from the Fund, the Fund’s holdings of its currency are in excess of 75 per cent of its quota. (Executive Board Meeting No. 292, March 30, 1948.)

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