Chapter

Appendix VIII. Decision on Charges for Transactions and Stand-By Arrangements

Author(s):
International Monetary Fund
Published Date:
September 1959
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I. The following is substituted for the last sentence of Rule 1-4 (g):

Thereafter, the charges shall rise in accordance with (e) and (f) above, provided that the rate shall not increase beyond 5 percent per annum when agreement is reached under this Rule for repurchase within three to five years after a drawing in accordance with Executive Board Decision No. 102-(52/ll).1 In the case of agreements on means to reduce the Fund’s holdings beyond five years, the Fund may adopt higher maximum rates. In the absence of agreement on means to reduce the Fund’s holdings, the Fund may impose such charges as it deems appropriate after the rate of 5 percent per annum is reached.

II. A stand-by arrangement shall provide for a fixed amount that can be purchased under it augmented by amounts equivalent to repurchases in respect of drawings made under the stand-by arrangement or made at the time when the stand-by arrangement is entered into, unless when any such repurchase is made the member informs the Fund that it does not wish the stand-by arrangement to be augmented by the amount of that repurchase. In exceptional circumstances, however, a stand-by arrangement may provide for purchases that increase the Fund’s holdings of the currency of the member having the stand-by arrangement up to a specified level, provided that the amounts the member may purchase shall in no case be increased by other members’ purchases of its currency.

III. 1. Paragraph 11.5(a) and (c) of Executive Board Decision No. 270-(53/95)2 shall be amended to read as follows:

(a) When a stand-by arrangement is entered into or renewed, a charge of ¼ of 1 percent per annum will be payable to the Fund in advance for the period of the stand-by arrangement or renewal. For any additional drawing rights that arise in the course of a stand-by arrangement, a further charge will be payable to the Fund in advance at the rate of ¼ of 1 percent per annum calculated on the basis of the amount of the additional drawing rights and the unexpired period of the stand-by arrangement.

(c) There will be credited against the service charge for a transaction under a stand-by arrangement the charges actually paid in respect of that amount under the stand-by arrangement and any stand-by arrangement which preceded it without interval at the rate of ¼ of 1 percent per annum and up to a maximum of ¼ of 1 percent on that amount, due allowance being made for any refunds under paragraph II.6 of this decision. For the purpose of calculating such credits and for the purpose of calculating refunds under (e) below, it shall be assumed that drawings are made in respect of drawing rights in the order in which such drawing rights arose.

2. The first sentence of Paragraph II.5(a) of Executive Board Decision No. 270-(53/95)3 as amended above shall be deemed to have applied to all stand-by arrangements entered into by the Fund since the adoption of Executive Board Decision No. 270-(53/95).3 Accordingly, the following amounts shall be refunded:

Bolivia$ 4,998.59
Brazil46,875.00
France164,062.50
Haiti2,030.63
India90,625.00
Paraguay4,375.00
Union of South Africa13,981.26

IV. Paragraph II.5(e) of Executive Board Decision No. 270- (53/95)3 is amended to read:

If a member notifies the Fund that it wishes to cancel a stand-by arrangement, the Fund will repay to the member a portion of the charge. The portion repaid will represent the charge for the period remaining unexpired at the date of cancellation for the amount that could still be drawn under the standby arrangement at the date of cancellation for which the member has paid a charge.

V. The following shall be added to Paragraph II.6 of Executive Board Decision No. 270-(53/95):4

To the extent that a charge has been levied on a part of the stand-by arrangement which falls into the gold tranche in the course of the stand-by arrangement, the Fund will refund the charge on that part for the unexpired period of the stand-by arrangement.

VI. Sections II, III.1, IV, and V above shall apply to stand-by arrangements entered into or renewed after the date of the adoption of this decision.

April 27, 1959

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