International Monetary Fund
Published Date:
September 1971
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Fiji joined the Fund, with a quota of $13 million, and became a participant in the Special Drawing Account on May 28, 1971.

Annual Report, 1970, pages 177-84.

Annual Report, 1965, pages 124-32.

Data on transactions are expressed in terms of U.S. dollars, regardless of the currencies in which they took place. Increased to $19.00 million, effective May 4, 1970, by payment of the fifth and final installment under the Fourth Quinquennial Review.

The Articles of Agreement define a gold tranche purchase as “a purchase by a member of the currency of another member in exchange for its own currency which does not cause the Fund’s holdings of the member’s currency to exceed one hundred percent of its quota, provided that for the purposes of this definition the Fund may exclude purchases and holdings under policies on the use of its resources for compensatory financing of export fluctuations.”

A super gold tranche position is that part of a gold tranche position that is the difference between the Fund’s holdings of a member’s currency and 75 per cent of the member’s quota when the holdings are less than 75 percent.

In addition, on April 30, 1971 the Fund approved a one-year stand-by arrangement for Guyana in the amount of $4 million, effective May 3, 1971.

This limitation and related aspects are discussed below.

The total remaining payable was reduced to $332 million by repurchases in May 1971 by France and Colombia amounting to $375 million and $10 million, respectively.

A voluntary repurchase may be defined as one that is voluntary on both sides of the transaction, i.e., the member is not obligated to make the repurchase and the Fund is not obligated to accept it. (See Executive Board Decision No. 7-(648) of March 8, 1951 —Selected Decisions of the Executive Directors and Selected Documents (Fourth Issue, Washington, 1970, pages 63-64).)

Decision adopted May 20, 1970 and reproduced in Appendix I.

Executive Board Decisions Nos. 3314-(71 /33) and 3315-C71/33), adopted April 21, 1971 and reproduced in Appendix I.

Executive Board Decision No. 3087-(70/64), adopted July 14, 1970, and as amended.

A similar situation arose with respect to the deutsche mark and the guilder after the end of the fiscal year 1970/71, when on May 9, 1971 the German and Netherlands authorities informed the Fund that for the time being they would not maintain the exchange rates for their respective currencies within the established margins. Similar decisions were taken by the Fund, and these currencies have continued to be used in Fund transactions.

Repayments in May 1971 further reduced outstanding borrowings to $152 million.

See pages 182-83.

Annual Report, 1970, pages 184-89. See also pages 34-35.

Paragraph 2 of the decision, to which reference is made below, is as follows:

2. In this letter, South Africa has stated its intention to offer to sell gold to the Fund only in the following circumstances:

  • (a)(i) when the price for gold in the market is $35 per ounce or below, up to an amount to meet South Africa’s current foreign exchange needs for that period and

    • (ii) regardless of the market price, up to the extent that South Africa has a need for foreign exchange over a semiannual period beyond the need that can be satisfied by the sale of all of its current production of newly-mined gold on the market or by sales to the Fund under (i) above;

  • (b) when South Africa has been designated under Article XXV, Section 5, up to the amount for which South Africa has been designated; and

  • (c) from the stock held by South Africa on March 17, 1968 up to $35 million in each quarter, beginning January 1, 1970.

The unit of value of special drawing rights is equivalent to 0.888671 gram of fine gold. This is equivalent to one U.S. dollar of the weight and fineness in effect on July 1, 1944.

Summary Proceedings of the Twenty-Fourth Annual Meeting of the Board of Governors (Washington, 1969), pages 326-27.

See page 155 above. One participant, China, exercised its option not to receive its share in each allocation.

See Annual Report, 1970, page 29.

Executive Board Decision No. 2901-(69/122) G/S, adopted December 18, 1969. See Annual Report, 1970, pages 176-77.

Executive Board Decision No. 3132-(70/87), adopted September 11, 1970 and reproduced in Appendix I.

Executive Board Decision No. 3130-(70/87), adopted September 11, 1970 and reproduced in Appendix I.

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