Chapter

APPENDIX IV: Principal Policy Decisions of the Executive Board

Author(s):
International Monetary Fund
Published Date:
January 1991
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A. Surveillance Over Members’ Exchange Rate Policies

(a) Extension of Period for Reviews

In Decision No. 8857-(88/64)1 and in Decision No. 8858-(88/64),2 as amended, “June 30, 1990” shall be replaced by “July 31, 1990.”

Decision No. 9492-(90/107) July 3, 1990

(b) Review of Implementation of Procedures and 1977 Document

1. The Executive Board has reviewed the general implementation of the Fund’s surveillance over members’ exchange rate policies, as required by paragraph VI of Procedures for Surveillance contained in the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63),3 adopted April 29, 1977, as amended, including the procedures for the conduct of consultations under Article IV, which in principle shall comprehend the regular consultations under Article VIII and Article XIV, and approves the modifications of the procedures as described [in the staff paper], in the light of the Managing Director’s summing up, until the next review, which shall be conducted not later than July 11, 1992.

2. The Executive Board also has reviewed the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63),3 adopted April 29, 1977, as amended, as required by paragraph 2 of that decision. The next review of the document shall be conducted not later than July 11, 1992.

Decision No. 9499-(90/111)

July 11, 1990

(c) Amendment of Procedures

The fourth sentence of Section II of Procedures for Surveillance contained in the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63),3 adopted April 29, 1977, as amended, shall be amended to read as follows:

Not later than three months after the termination of discussions between the member and the staff, the Executive Board shall reach conclusions and thereby complete the consultation under Article IV, Section 3, provided that an interim consultation shall be completed without conclusions unless, within two weeks after the date of the circulation of the staff report to the Board, an Executive Director requests discussion by the Executive Board of the staff report or the Managing Director places the staff report for discussion on the agenda of the Executive Board.

Decision No. 9637-(91/15)

February 8, 1991

B. Policy on Enlarged Access to the Fund’s Resources

(a) Modalities for Financing—Substitution of Ordinary for Borrowed Resources

1. Whenever the Fund has disbursed all resources borrowed for the financing of purchases under the Enlarged Access Policy, ordinary resources shall be substituted for borrowed resources in financing purchases made under arrangements under the Enlarged Access Policy that have been approved prior to, or will be approved after, the date of this decision, provided that this decision shall only apply to arrangements approved not later than the date on which the requirement for the effectiveness of increases in quotas under the Ninth General Review of Quotas specified in paragraph 3 of the Resolution of the Board of Governors No. 45-2 has been fulfilled, or December 31, 1991, whichever is earlier.

2. In Decision No. 6783-(81/40),4 adopted March 11, 1981, as amended, borrowed resources shall be deemed to include ordinary resources of the Fund that are substituted for borrowed resources (“substituted resources”), except in paragraphs 10(b) and 14 of that decision. The Fund will state, for each purchase involving substituted resources, the amount of substituted resources used in such purchase.

3. The Fund will review this decision at the same time as it reviews Decision No. 6783-(81/40),4 adopted March 11, 1981, as amended.

Decision No. 9546-(90/145)

September 17, 1990

(b) Modalities for Financing—Amendment of Rule 1-6(4)

In Rule 1-6(4), the following shall be added in the introductory paragraph after “(Executive Board Decision No. 8955-(88/126)),”:

or (vii) of resources substituted for borrowed resources under the Policy on Enlarged Access (Executive Board Decision No. 6783-(81/40), as amended) pursuant to Executive Board Decision No. 9546-(90/145), adopted September 17, 1990.

Decision No. 9547-(90/145)

September 17, 1990

(c) Amendment of Guidelines on Access Limits

The third sentence of paragraph (a) of Decision No. 7600-(84/3),5 adopted January 6, 1984, as amended, shall be amended to read as follows:

Access by members to the Fund’s general resources under arrangements approved under Decision No. 6783-(81/40)4 during 1986, 1987, 1988, 1989, and the period until the date on which the requirement for the effectiveness of increases in quotas under the Ninth General Review of Quotas specified in paragraph 3 of the proposed Resolution of the Board of Governors on the Ninth General Review of Quotas,6 attached to Decision No. 9436-(90/79), adopted by the Executive Board on May 21, 1990, has been fulfilled shall be subject to annual limits of 90 or 110 percent of quota, three-year limits of 270 or 330 percent of quota, and cumulative limits of 400 or 440 percent of quota net of scheduled repurchases, depending on the seriousness of the member’s balance of payments needs and the strength of its adjustment effort, provided that, through December 31, 1991, the annual, three-year, and cumulative limits shall be 110 percent of quota, 330 percent of quota, and 440 percent of quota net of scheduled repurchases, respectively.

Decision No. 9584-(90/161)

November 15, 1990

C. Compensatory and Contingency Financing Facility

(a) Amendment

The following paragraphs of Decision No. 8955-(88/126),7 as amended, establishing the Compensatory and Contingency Financing Facility, shall be amended to read as follows:

12. (a) Subject to the provisions of subparagraphs (b) and (c) below, a member may expect that its request for a purchase on account of an export shortfall under this Section or Section IV will be met immediately, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

(i) 40 percent of the member’s quota, if the Fund is satisfied that the member will cooperate with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties; and

(ii) 65 percent of the member’s quota, if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which performance is broadly satisfactory, or if the Fund approves such an arrangement for the member at the time of the request, or if the member’s current and prospective policies are such as would, in the Fund’s view, meet such criteria.

(b) If the Fund considers that the record of the member’s cooperation with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties had not been satisfactory, the member may expect that its request for a purchase on account of an export shortfall under this Section or Section IV will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

(i) 20 percent of the member’s quota, if the Fund is satisfied that the member has taken action that gives, prior to submission of the request, a reasonable assurance that policies corrective of the member’s balance of payments problem will be adopted;

(ii) 40 percent of the member’s quota, if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which performance is broadly satisfactory, or if the Fund approves such an arrangement for the member at the time of the request, or if the member’s current and prospective policies are such as would, in the Fund’s view, meet such criteria; and

(iii) 65 percent of the member’s quota, if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which a review is completed by the Fund at the time of the request, or if the member’s policies in the recent past, as well as its current and prospective policies, are such as would, in the Fund’s view, continue to meet such criteria.

(c) Notwithstanding subparagraphs (a) and (b) above, if a member’s balance of payments position apart from the effects of the export shortfall is satisfactory, such member may expect that its request for a purchase on account of an export shortfall under this Section or Section IV will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed 83 percent of the member’s quota.

(d) Approval in principle of a Fund arrangement shall be deemed to fulfill the conditions in subparagraphs (a)(i) and (b)(i) above.

17. When approving a Fund arrangement, or when completing its review of an annual program supported by a multiyear Fund arrangement, the Fund will be prepared to decide, at the request of the member and subject to the provisions of this decision, that, should unfavorable deviations in the member’s balance of payments due to adverse external contingencies occur during the period of the program supported by the arrangement, it will provide to the member external contingency financing in association with the arrangement.

18. (a) Such external contingency financing will only be provided in association with a Fund arrangement, generally on the basis of a review by the Executive Board, to a member facing unanticipated deviations from the baseline projections of key external variables of the member’s current account that are highly volatile and easily identifiable and that relate to the specified external contingencies during the period of the projections (hereinafter called the “baseline period”), if:

(i) the deviations from the baseline projections are outside of the control of the member;

(ii) the member’s performance under the associated Fund arrangement is satisfactory; and

(iii) the member is prepared to adapt its adjustment policies as may be necessary to ensure the viability of the program supported by the associated arrangement through a mix of adjustment and financing appropriate to the circumstances of the member.

(b) The need for financing to be provided on account of external contingencies pursuant to this Section will be established after taking into account the extent to which the effects of unanticipated deviations in external contingencies affecting the member’s current account that have not been specified pursuant to paragraph 19(a)(i) largely offset the effects of deviations in the external contingencies that have been so specified.

(c) Such financing will be limited to the extent that the amount of the member’s balance of payments deficit that exists at the time of the member’s request for a contingency purchase exceeds the corresponding amount specified in the member’s then current program supported by the associated Fund arrangement.

19.(a) When the Fund approves an arrangement, or when the Fund completes its review of an annual program supported by a multiyear Fund arrangement, in association with which external contingency financing is to be provided under this Section, it will specify for the arrangement:

(i) the external contingencies that will be taken into account;

(ii) the maximum amount of purchases that may be permitted in case of unfavorable external contingent deviations;

(iii) the minimum threshold, which shall generally be 10 percent of the member’s quota, that must be exceeded by the applicable net sum of deviations, cumulated from the beginning of the baseline period, before external contingency purchases may be permitted or adjustments pursuant to paragraph 27 may be required;

(iv) the proportion of the applicable net sum of deviations that may be financed under this Section, subject to any subsequent changes that may be required pursuant to paragraph 18(a)(iii) to ensure the viability of the member’s program supported by the arrangement; and

(v) the maximum amount by which the associated arrangement could be reduced or other adjustments pursuant to paragraph 27 could be required in case of favorable external contingent deviations, which amount will normally be the same as the amount specified pursuant to (ii) above.

(b) For purposes of this Section, the expression “net sum of deviations” shall mean the net aggregate effect on the member’s balance of payments of deviations in the variables relating to the external contingencies specified pursuant to subparagraph (a)(i) above; and the expression “applicable net sum of deviations” shall mean the net sum of deviations in the situations covered by paragraph 20(b) or the net sum of deviations adjusted for the limit on interest cost deviations in the situations covered by paragraph 20(c), as appropriate.

(c) The Fund shall determine the length of each baseline period, which shall generally be from twelve to eighteen months, and the maximum amount of external contingency purchases that may be permitted on account of deviations that occur during such baseline period.

(d) When a member makes a request under paragraph 17, every effort will be made to obtain contingent financing from other sources.

20 (a) Subject to the limitations specified by this Decision, the amount of an external contingency purchase under this Section shall be determined on the basis of the applicable net sum of the deviations in accordance with subparagraphs (b) and (c) below. Deviations will be calculated in relation to baseline projections established for each period.

(b) Except as provided in subparagraph (c) below, the amount that may be financed under this Section shall be determined as the net sum of deviations reduced by the equivalent Of the minimum threshold specified pursuant to paragraph 19(a)(iii) and subsequently multiplied by the proportion specified pursuant to paragraph 19(a)(iv).

(c) In case of a favorable or unfavorable deviation in net interest costs that, when multiplied by the proportion specified pursuant to paragraph 19(a)(iv), would exceed the percentage of the member’s quota that is available for purchases under paragraph 21(a), the amount that may be financed under this Section shall be determined as the sum of:

(i) the net aggregate amount of the deviations, other than a deviation in net interest costs, multiplied by the proportion specified pursuant to paragraph 19(a)(iv); and

(ii) the amount of the deviation in net interest costs reduced by the equivalent of the minimum threshold specified pursuant to paragraph 19(a)(iii) and multiplied by the same proportion, up to a limit equivalent to the percentage of the member’s quota available for purchases under paragraph 21(a), except that any excess of a favorable or unfavorable deviation in net interest costs over such limit shall be included in the calculation as required to avoid or to reduce an unfavorable or favorable net sum of deviations;

For the cases covered by this subparagraph (c), the net sum of deviations shall be determined by dividing the amount that may be financed by the proportion specified pursuant to paragraph 19(a)(iv) and by adding an amount equivalent to the minimum threshold specified pursuant to paragraph 19(a)(iii).

(d) Once the threshold adjustment in subparagraph (b) or subparagraph (c) above has been made for a purchase in respect of a baseline period, no further such adjustment shall be made for later purchases in respect of that period.

(e) Purchases under this Section shall be permitted only when the applicable net sum of deviations exceeds the minimum threshold specified by the Fund pursuant to paragraph 19(a)(iii), provided that in applying this subparagraph (e) the limit specified by subparagraph (c)(ii) above shall be disregarded.

21. (a) Subject to the other limitations on purchases specified in this Decision, the Fund’s holdings of a member’s currency resulting from purchases on account of deviations in net interest costs in association with all Fund arrangements for the member shall not exceed 35 percent of the member’s quota.

(b) For purposes of applying the imitation in subparagraph (a) above, when a purchase under this Section is attributable to unfavorable deviations in net interest costs and in one or more other variables relating to external contingencies, the portion of the purchase that is to be allocated to a deviation in net interest costs shall be determined on the basis of the share of such deviation in the applicable net sum of deviations, and in determining this share the portion of the threshold reduction in paragraph 20(b) that is to be allocated to net interest costs shall be determined on the same basis.

27. If, in respect of any baseline period, the Fund finds that a favorable applicable net sum of deviations with respect to the contingencies specified pursuant to paragraph 19(a)(i) has occurred, the following provisions shall apply, subject to the maximum amount specified pursuant to paragraph 19(a)(v) and only if such net sum of deviations has not been largely offset by the effects of unanticipated deviations in external contingencies affecting the member’s current account that have not been specified pursuant to paragraph 19(a)(i):

(a) When no purchase under this Section has been made by the member in respect of the baseline period for which the Fund makes such finding, as a preference, the limits on, or objectives for, the member’s reserves under the associated Fund arrangement shall be increased or, as a second option, the amount of the associated Fund arrangement shall be reduced, or both, as determined by the Fund, by an amount that shall be equivalent to a substantial part of the applicable net sum of deviations not exceeding the amount that would have been financed under this Section if the applicable net sum of deviations would have been unfavorable; and

(b) When one or more purchases under this Section had earlier been made by the member in respect of the baseline period for which the Fund makes such finding, as a preference, the limits on, or objectives for, the member’s reserves under the associated Fund arrangement shall be increased or, as a second option, the amount of the associated Fund arrangement shall be reduced, or both, as determined by the Fund, by an amount that shall be equivalent to a substantial part of the applicable net sum of deviations not exceeding the amount that would have been financed under this Section if the applicable net sum of deviations that have occurred since the latest of any such earlier purchases would have been unfavorable, provided that the member may choose to substitute for a reduction of the amount of the arrangement a repurchase of a corresponding amount of the Fund’s holdings of the member’s currency in respect of such earlier purchases.

28. Until June 30, 1994, the Fund will be prepared to extend financial assistance subject to the provisions of this Decision to members that encounter a balance of payments difficulty produced by an excess in the cost of their cereal imports.

36. (a) The provisions of paragraph 12 shall apply to purchases on account of export shortfalls under this Section.

(b) Subject to the provisions of subparagraphs (c) and (d) below, a member may expect that its request for a purchase on account of an excess in cereal import costs under this Section will be met immediately, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

(i) 17 percent of the member’s quota, if the Fund is satisfied that the member will cooperate with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties; and

(ii) 42 percent of the member’s quota, if the member has a Fund arrangement, supporting a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which performance is broadly satisfactory, or if the Fund approves such an arrangement at the time of the request, or if the member’s current and prospective policies are such as would, in the Fund’s view, meet such criteria.

(c) If the Fund considers that the record of the member’s cooperation with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties had not been satisfactory, the member may expect that its request for a purchase on account of an excess in cereal import costs under this Section will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

(i) 17 percent of the member’s quota, if the Fund is satisfied that the member has taken action that gives, prior to submission of the request, a reasonable assurance that policies corrective of the member’s balance of payments problem will be adopted; and

(ii) 42 percent of the member’s quota, if the member has a Fund arrangement, supporting a program that meets the criteria for the Use of the Fund’s general resources in the upper credit tranches, under which a review is completed by the Fund at the time of the request, or if the member’s policies in the recent past, as well as its current and prospective policies, are such as would, in the Fund’s view, continue to meet such criteria.

(d) Notwithstanding subparagraphs (b) and (c) above, if a member’s balance of payments position apart from the effects of the excess in cereal import costs is satisfactory, such member may expect that its request for a purchase on account of an excess in cereal import costs under this Section will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed 83 percent of the member’s quota.

(e) Approval in principle of a Fund arrangement shall be deemed to fulfill the conditions in subparagraphs (b)(i) and (c)(i) above.

46. The Fund will review this decision not later than July 16, 1992.

II.

Paragraph 41 of Decision No. 8955-(88/126),8 as amended, shall be deleted and the subsequent paragraphs shall be renumbered accordingly.

Decision No. 9503-(90/114)

July 16, 1990

(b) Amendment—Coverage of Services

(a) Paragraph 13 of Decision No. 8955-(88/126),8 adopted August 23, 1988, as amended, shall be amended to read as follows:

If, in the opinion of the Fund, adequate data on receipts from services other than investment income are available, the member requesting a purchase under this Section shall specify whether the receipts shall be included or excluded in the calculation of the shortfall. The choice by the member to include such receipts shall continue to apply for a period of three years.

(b) Paragraph 46 of Decision No. 8955-(88/126),8 adopted August 23, 1988, as amended, shall be renumbered paragraph 47, and the following paragraph shall be added as paragraph 46:

Notwithstanding paragraph 13, any member that has specified, for a purchase made prior to [the date of adoption of this decision], that receipts from travel and workers’ remittances shall be included in the calculation of the shortfall, shall specify, for the first purchase under Section II or Section IV following [the date of adoption of this decision], whether services shall be included or excluded in the calculation of the shortfall.

Decision No. 9586-(90/161)

November 15, 1990

(c) Amendment—Early Drawing Provision

Paragraph 14 of Decision No. 8955-(88/126),8 adopted August 23, 1988, as amended, shall be amended to read as follows:

The existence and amount of an export shortfall for the purpose of any purchase under this Section shall be determined with respect to the latest 12-month period preceding the request for which the Fund has sufficient statistical data, provided that a member may request a purchase in respect of a shortfall year for which not more than 12 months of the data on merchandise exports and on receipts from services are estimated.

Decision No. 9587-(90/161)

November 15, 1990

(d) Amendment—Contingency Mechanism

(a) Paragraph 17 of Decision No. 8955-(88/126),8 adopted August 23, 1988, as amended, shall be amended to read as follows:

When approving a Fund arrangement, or when completing a review under such an arrangement at least six months before the expiration date of the arrangement, the Fund will be prepared to decide, at the request of the member and subject to the provisions of this decision, that, should unfavorable deviations in the member’s balance of payments due to adverse external contingencies occur during the period of the program supported by the arrangement, it will provide to the member external contingency financing in association with the arrangement.

(b) The introductory sentence of paragraph 19 of Decision No. 8955-(88/126),9 adopted August 23, 1988, as amended, shall be amended to read as follows:

When the Fund approves an arrangement, or when the Fund completes a review under such an arrangement, in association with which external contingency financing is to be provided under this Section, it will specify for the arrangement: …

Decision No. 9588-(90/161)

November 15, 1990

(e) Amendment—Compensatory Financing of Fluctuations in Cost of Oil Imports

In Decision No. 8955-(88/126),9 adopted August 23, 1988, as amended, paragraph 1 shall be amended to read as follows:

The Fund is prepared to extend financial assistance, in accordance with the provisions of this Decision, to members that encounter balance of payments difficulties arising out of (i) temporary export shortfalls, (ii) adverse external contingencies, (iii) excess costs of cereal imports, or (iv) excess costs of oil imports.

Paragraph 6 shall be amended to read as follows:

The Fund shall indicate in an appropriate manner which purchases by a member are made pursuant to Section II, III, IV, or V of this Decision, and the export shortfall component, the cereal import cost component, and the oil import cost component of each purchase under Section IV or Section V.

Paragraph 8 shall be amended to read as follows:

(a) Subject to the other limitations on purchases specified by this Decision, the Fund’s holdings of a member’s currency resulting from purchases under this Decision shall not exceed any of the following access limits:

  • (i) a combined limit of 105 percent of the member’s quota for

    • — the sum of purchases on account of export shortfalls under Section II, Section IV, or Section V and purchases on account of external contingencies under Section III;

    • — the sum of purchases on account of export shortfalls under Section II, Section IV, or Section V and purchases on account of an excess in cereal import costs under Section IV or Section V;

    • — the sum of purchases on account of external contingencies under Section III and purchases on account of an excess in cereal import costs under Section IV or Section V;

    • — the sum of purchases on account of export shortfalls under Section II, Section IV, or Section V and purchases on account of excesses in oil import costs under Section V; and

    • — the sum of purchases on account of excesses in cereal import costs under Section IV or Section V and purchases on account of excesses in oil import costs under Section V.

  • (ii) a limit of 83 percent of the member’s quota for purchases on account of export shortfalls under Section II, Section IV, or Section V if at the time of the request for the purchase the member’s balance of payments position apart from the effects of the export shortfall is satisfactory, and a limit of 40 percent of the member’s quota for such purchases in all other cases;

  • (iii) a limit of 40 percent of the member’s quota for purchases on account of external contingencies under Section III;

  • (iv) a limit of 83 percent of the member’s quota for purchases on account of an excess in cereal import costs under Section IV or Section V if at the time of the request for the purchase the member’s balance of payments position apart from the effects of the excess in cereal import costs is satisfactory, and a limit of 17 percent of the member’s quota for such purchases in all other cases;

  • (v) a limit of 83 percent of the member’s quota for purchases on account of an excess in oil import costs under Section V if at the time of the request for the purchase the member’s balance of payments position apart from the effects of the excess in oil import costs is satisfactory, and a limit of 57 percent of the member’s quota for such purchases in all other cases; and

  • (vi) a combined limit of 122 percent of the member’s quota for the sum of purchases on account of export shortfalls under Section II, Section IV, or Section V, purchases on account of external contingencies under Section III, purchases on account of an excess in cereal import costs under Section IV or Section V, and purchases on account of an excess in oil import costs under Section V.

(b) Notwithstanding the provisions of subparagraph (a)(ii), (iii), (iv), and (v) above, the limits of 40, 17, and 57 percent above may be exceeded to permit additional purchases under this Decision, provided that the aggregate amount of the Fund’s holdings of the member’s currency resulting from such additional purchases shall not exceed 25 percent of the member’s quota.

The introductory sentence of paragraph 12(a) shall be amended to read as follows:

Subject to the provisions of subparagraphs (b) and (c) below, a member may expect that its request for a purchase on account of an export shortfall under this Section, Section IV, or Section V will be met immediately, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed: …

The introductory sentence of paragraph 12(b) shall be amended to read as follows:

If the Fund considers that the record of the member’s cooperation with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties had not been satisfactory, the member may expect that its request for a purchase on account of an export shortfall under this Section, Section IV, or Section V will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed: …

Paragraph 12(c) shall be amended to read as follows:

Notwithstanding subparagraphs (a) and (b) above, if a member’s balance of payments position apart from the effects of the export shortfall is satisfactory, such member may expect that its request for a purchase on account of an export shortfall under this Section, Section IV, or Section V will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed 83 percent of the member’s quota.

A new paragraph 12(e) shall be inserted as follows:

When a member has outstanding purchases on account of excesses in oil import costs under Section V, the limits in subparagraphs (a), (b), and (c) above shall be reduced in accordance with paragraph 49(f).

Paragraph 16(b) shall be amended to read as follows:

If a member requests a purchase under this Section in relation to a shortfall year that in whole or in part is included in the period of the two postshortfall years concerning any earlier purchase under this Section, Section IV, or Section V, the amount of the requested purchase shall be adjusted so as to take into account any amount by which such earlier purchase differs from the amount that could have been purchased on the basis of data available at the time of the request.

Paragraph 29 shall be amended to read as follows:

For a period of three years from the date of a member’s first request for a purchase in respect of cereal imports under Decision No. 6860-(81/81),10 or under this Section or Section V, any purchases by the member in respect of its export shortfalls shall be made under this Section instead of under Section II of this Decision. The same provision shall apply if, after the end of the three-year period, the member makes a new purchase in respect of cereal imports under this Section or Section V.

The introductory sentence of paragraph 36(b) shall be amended to read as follows:

Subject to the provisions of subparagraphs (c) and (d) below, a member may expect that its request for a purchase on account of an excess in cereal import costs under this Section or Section V will be met immediately, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed: …

The introductory sentence of paragraph 36(c) shall be amended to read as follows:

If the Fund considers that the record of the member’s cooperation with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties had not been satisfactory, the member may expect that its request for a purchase on account of an excess in cereal import costs under this Section or Section V will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed: …

Paragraph 36(d) shall be amended to read as follows:

Notwithstanding subparagraphs (b) and (c) above, if a member’s balance of payments position apart from the effects of the excess in cereal import costs is satisfactory, such member may expect that its request for a purchase on account of an excess in cereal import costs under this Section or Section V will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed 83 percent of the member’s quota.

A new paragraph 36(f) shall be inserted as follows:

When a member has outstanding purchases on account of excesses in oil import costs under Section V, the limits in subparagraphs (b), (c), and (d) above shall be reduced in accordance with paragraph 49(f).

Paragraph 38(b) shall be amended to read as follows:

If a member requests a purchase under this Section in relation to a shortfall year that in whole or in part is included in the period of the two postshortfall years concerning any earlier purchase under Section II, Section V, or this Section, the amount of the requested purchase shall be adjusted so as to take into account any amount by which such earlier purchase differs from the amount that could have been purchased on the basis of data available at the time of the request.

A new Section V shall be inserted as follows:

Section V. Compensatory Financing of Fluctuations in the Cost of Oil Imports

41. Until December 31, 1991, the Fund will be prepared to extend financial assistance subject to the provisions of this Decision to members that encounter a balance of payments difficulty produced by an excess in the cost of their oil imports.

42. For the period from the date of a member’s first request for a purchase in respect of oil imports under this Section through December 31, 1991, any purchase by the member in respect of its export shortfalls or of its excesses in cereal import costs shall be made under this Section instead of under Section II or Section IV of this decision.

43. A member with balance of payments difficulties may expect that its request for a purchase under this Section will be met if the Fund is satisfied that:

(a) any shortfall in exports, any excess costs in oil imports, and any excess costs in cereal imports that result in a net shortfall in the member’s exports are of a short-term character and are largely attributable to circumstances beyond the control of the member, and

(b) the member satisfies the conditions of cooperation with the Fund in accordance with paragraph 49.

44. (a) Subject to the limits specified in paragraphs 8 and 49, a member may request a purchase under this Section for an amount equal to the net shortfall in its exports calculated as the sum of its export shortfall, the excess in its oil import costs, and, if cereal import costs are to be included in the calculation of the net shortfall in exports in accordance with paragraph 29, the excess in its cereal import costs.

(b) (i) For the calculation of the net shortfall in exports, an excess in exports shall be considered a negative shortfall in exports, a shortfall in oil import costs shall be considered a negative excess in oil import costs, and a shortfall in cereal import costs shall be considered a negative excess in cereal import costs.

  • (ii) An export shortfall shall be determined in accordance with Section II, and an excess in cereal import costs shall be determined in accordance with Section IV.

  • (iii)An excess in oil import costs shall be determined in accordance with paragraphs 45 and 46.

(c) For the purposes of this Section, oil imports will be understood to mean imports of crude petroleum, petroleum products, and natural gas. Such imports shall be included in the calculation of an excess in oil import costs to the extent that, in the opinion of the Fund, adequate data are available.

45. The existence and amount of an excess in the cost of oil imports shall be determined, for the purposes of purchases under this Section, with respect to the latest 12-month period preceding the request for which the Fund has sufficient statistical data, provided that the Fund may allow a member to make a purchase on the basis of estimated data in respect of a 12-month period ending not later than 12 months after the latest month for which the Fund has sufficient statistical data on the member’s oil import costs. The calculation of a member’s shortfall or excess in exports, of its excess or shortfall in the cost of oil imports, and of its excess or shortfall in the cost of cereal imports shall be made for the same 12-month period.

46. In order to identify more clearly what are to be regarded as excess costs of oil imports of a short-term character, the Fund, in consultation with the member concerned, will seek to establish reasonable estimates regarding the medium-term trend of the member’s oil import costs. For the purposes of this Section, the excess in a member’s oil imports for the 12-month period referred to in paragraph 45 shall be the amount by which the member’s oil imports in that 12-month period are more than the arithmetic average of the member’s oil imports for the 5-year period centered on that 12-month period.

47. The amount of a purchase under this Section, as defined in paragraph 44, may be on account of an export shortfall, on account of an excess in oil import costs, or on account of an excess in cereal import costs, or it may be on account of any combination of two or three of these components. The total amount of the purchase and the amount of each component are subject to the limits specified in paragraphs 8 and 49.

48. (a) The part of a purchase relating to an export shortfall, subject to the limits in paragraphs 8 and 49, shall not exceed the lesser of the export shortfall defined in paragraph 44(b)(ii) and the net shortfall in exports defined in paragraph 44(a).

(b) The part of a purchase relating to an excess in oil import costs, subject to the limits in paragraphs 8 and 49, shall not exceed the lesser of the excess in oil import costs defined in paragraph 44(b)(iii) and the net shortfall in exports defined in paragraph 44(a).

(c) The part of a purchase relating to an excess in cereal import costs, subject to the limits in paragraphs 8 and 49, shall not exceed the lesser of the export shortfall defined in paragraph 44(b)(ii) and the net shortfall in exports defined in paragraph 44(a).

49. (a) The provisions of paragraph 12 shall apply to purchases on account of export shortfalls under this Section.

(b) The provisions of paragraph 36 shall apply to purchases on account of excesses in cereal import costs under this Section.

(c) Subject to the provisions of subparagraphs (d) to (i) below, a member may expect that its request for a purchase on account of an excess in oil import costs under this Section will be met immediately, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

  • (i) 40 percent of the member’s quota if the Fund is satisfied that the member will cooperate with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties; and

  • (ii) 82 percent of the member’s quota if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which performance is broadly satisfactory, or if the Fund approves such an arrangement for the member at the time of the request, or if the member’s current and prospective policies are such as would, in the Fund’s view, meet such criteria.

(d) Subject to the provisions of subparagraphs (e) to (i) below, if the Fund considers that the record of the member’s cooperation with the Fund in an effort to find, where required, appropriate solutions for its balance of payments difficulties had not been satisfactory, the member may expect that its request for a purchase on account of an excess in oil import costs under this Section will be met, whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed:

  • (i) 20 percent of the member’s quota if the Fund is satisfied that the member has taken action that gives, prior to the submission of the request, a reasonable assurance that policies corrective of the member’s balance of payments problem will be adopted;

  • (ii) 40 percent of the member’s quota if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which performance is broadly satisfactory, or if the Fund approves such an arrangement for the member at the time of the request, or if the member’s current and prospective policies are such as would, in the Fund’s view, meet such criteria; and

  • (iii) 82 percent of the member’s quota if the member has a Fund arrangement, in support of a program that meets the criteria for the use of the Fund’s general resources in the upper credit tranches, under which a review is completed by the Fund at the time of the request, or if the member’s policies in the recent past, as well as its current and prospective policies, are such as would, in the Fund’s view, continue to meet such criteria.

(e) Notwithstanding subparagraphs (c) and (d) above, if a member’s balance of payments position apart from the effects of the excess in oil import costs is satisfactory, such member may expect that its request for a purchase on account of an excess in oil import costs under this Section will be met whenever the purchase would not cause the Fund’s holdings of the member’s currency resulting from such purchases to exceed 83 percent of the member’s quota.

(f) Notwithstanding subparagraphs (c), (d), and (e) above, the Fund’s holdings of a member’s currency resulting from purchases on account of excesses in oil import costs under this Section shall not exceed:

  • — in the case of a member falling under subparagraph (c)(i), (d)(i), or (d)(ii) above, the amount of access that remains available to the member for purchases on account of export shortfalls under Section II, Section IV, or this Section, and

  • — in the case of a member falling under subparagraph (c)(ii), (d)(iii), or (e) above, the amount of access that remains available to the member either for purchases on account of export shortfalls under Section II, Section IV, or this Section or for purchases on account of excesses in cereal import costs under Section IV or this Section.

When a member makes a purchase on account of an excess in oil import costs under this Section, the access limits in paragraph 12 for purchases on account of export shortfalls and the access limits in paragraph 36 for purchases on account of excesses in cereal import costs shall be reduced accordingly. If the member falls under subparagraph (c)(ii), (d)(iii), or (e) above, it shall, when requesting the purchase, specify, in accordance with this subparagraph, the extent to which this purchase shall reduce the access limits in paragraph 12 for purchases on account of export shortfalls and the access limits in paragraph 36 for purchases on account of excesses in cereal import costs.

(g) The Fund shall approve a member’s request for a purchase on account of an excess in oil import costs under subparagraph (c), (d), or (e) above only if it is satisfied that the member is pursuing appropriate energy policies.

(h) A purchase under subparagraph (c)(i) or (d)(i) above shall be approved by the Fund if the Fund is satisfied, based on a written statement submitted by the member, that the member will pursue appropriate macro-economic policies and objectives.

(i) Except in this subparagraph, when compensatory financing is phased in accordance with this subparagraph, references in this Decision to purchases on account of excesses in oil import costs under this Section shall be understood to apply to the amount of compensatory financing before phasing. Whenever estimated data are used for 9 months or more of the 12-month period referred to in paragraph 45, the amount of compensatory financing on account of an excess in oil import costs under this Section shall be phased in two purchases in accordance with this subparagraph. The member may expect that its request for the first purchase, which shall be for up to 65 percent of the amount, shall be met immediately. The member may expect that its request for the second purchase, which shall be for up to the difference between the amount recalculated on the basis of the actual data available at the time of the request and the amount of the first purchase, shall be met after actual data become available for at least 6 months of the 12-month period referred to in paragraph 45, provided that:

  • — if policy implementation by the member or the external circumstances of the member differ materially from that originally anticipated at the time of the request for the first purchase, the Fund may decide not to approve, or to reduce the amount available under, the second purchase, and

  • — if the sum of the first purchase and of the second purchase requested by the member exceeds the limit in this paragraph under which the first purchase was made, the second purchase shall be subject to the relevant provisions of subparagraph (c), (d), or (e) above instead of the provisions of this subparagraph.

(j) Without prejudice to subparagraph (g) above, approval in principle of a Fund arrangement shall be deemed to fulfill the conditions in subparagraphs (c)(i) and (d)(i) above.

50. A member shall allocate the amount of its purchase as between the export shortfall, the oil import, and the cereal import element, where the sum of the three components, each as limited by paragraph 8,

(a) exceeds the limit of 105 percent of the member’s quota, if, at the time of the request for the purchase, the member’s balance of payments position apart from the effects of the export shortfall, the excess in oil import costs, or the excess in cereal import costs is satisfactory; or

(b) exceeds the amount that the member may purchase pursuant to the access limits in paragraph 8, in all other cases.

51. (a) When a member has made a purchase under this Section on the basis of estimated statistical data and the amount of the purchase exceeds the amount that could have been purchased on the basis of actual statistical data, the member will be expected to make a prompt repurchase in respect of the outstanding purchase, in an amount equivalent to the excess.

(b) If a member requests a purchase under this Section in relation to a shortfall year that in whole or in part is included in the period of the two postshortfall years concerning any earlier purchase under Section II, Section IV, or this Section, the amount of the requested purchase shall be adjusted so as to take into account any amount by which such earlier purchase differs from the amount that could have been purchased on the basis of data available at the time of the request.

52. (a) Subject to paragraph 51(a), when a reduction in the Fund’s holdings of a member’s currency is attributed to a purchase under this Section, the member shall attribute that reduction between the outstanding oil import component, export shortfall component, and cereal import component of the purchase.

(b) When the Fund’s holdings of a member’s currency resulting from a purchase under this Section, Section II, or Section IV are reduced by the member’s repurchase or otherwise, the member’s access to the Fund’s resources under this Section will be restored pro tanto, subject to the limits in paragraphs 8 and 49.

53. (a) After the expiration of the period referred to in paragraph 42, the total amount of the export shortfall components and of the cereal import components of a member’s purchases outstanding under this Section shall be counted as having been purchased under Section II or Section IV, depending on the Section under which they would otherwise have been made.

(b) The provisions of Section II or of Section IV shall continue to apply to the export shortfall and cereal import components of a purchase under this Section after the expiration of the period referred to in paragraph 42 or the expiration of this Section.

Section V shall become Section VI, paragraphs 41 to 46 shall be renumbered 54 to 59, and paragraph 47 shall be renumbered 61. The first sentence of paragraph 57 shall be amended to read as follows:

If on August 23, 1988 the Fund’s holdings of a member’s currency resulting from purchases on account of export shortfalls exceed 65 percent of the member’s quota, purchases by the member on account of export shortfalls under Section II, Section IV, or Section V and purchases on account of external contingencies under Section III may be permitted, up to a transitional combined access limit for the sum of such purchases, in excess of the 105 percent and 122 percent limits specified in paragraph 8(a).

Paragraph 58 shall be amended to read as follows:

(a) Rule 1-6(4) shall be amended by inserting the following new subparagraph (vi):

or (vi) under the Compensatory and Contingency Financing Facility (Executive Board Decision No. 8955-(88/126), as amended).

(b) Decision No. 5703-(78/39)11 shall be amended by inserting the following clause in paragraph 1(a) immediately after the reference to Decision No. 6860-(81/81)12:

or the decision on the Compensatory and Contingency Financing Facility (Decision No. 8955-(88/126), as amended).

Paragraph 59 shall be amended to read as follows:

Notwithstanding paragraph 13, any member that has specified, for a purchase made prior to November 15, 1990, that receipts from travel and workers’ remittances shall be included in the calculation of the shortfall shall specify, for the first purchase under Section II, Section IV, or Section V following November 15, 1990, whether services shall be included or excluded in the calculation of the shortfall.

The following new paragraph 60 shall be inserted:

60. Notwithstanding paragraph 41, a purchase under Section V may be made after the date of expiration of that Section, if (i) it results from a request initiated before such date of expiration and relates to a net shortfall year ending not later than December 31, 1991, or (ii) it is a second purchase within the meaning of paragraph 49(i), and the first purchase was made prior to such date of expiration or was made pursuant to (i) above, provided that a first purchase within the meaning of paragraph 49(i) may not be made after June 30, 1992.

Decision No. 9604-(90/170)

December 5, 1990

D. Operational Budget—Method of Allocating Currencies—Operational Guidelines

The Executive Board approves the operational guidelines set out in the Annex.

Decision No. 9480-(90/103)

June 27, 1990

Annex

1. On the transfer side of the operational budget, currencies will be allocated in proportion to members’ gold and foreign exchange reserves, as reported in International Financial Statistics, provided that for the budgets before the March-May 1991 budget, the Fund’s holdings of a member’s currency in terms of quota shall not be reduced as a result of transfer allocations below a floor of one half of the average level, expressed as a percent of quota, at which the Fund would hold by the end of a budget period the currencies of members that are sufficiently strong to be included in the operational budget (excluding the U.S. dollar). The floor would be raised to two thirds of the average level of currencies in relation to quotas starting with the budget for the period March-May 1991;

2. The use of the U. S. Dollar in transfers shall be included in the operational budgets on the basis of ad hoc proposals and, to the extent feasible, the Fund will aim to maintain the Fund’s holdings of U.S. dollars close to the average level of the Fund’s holdings of currencies of other members that are sufficiently strong to be included in the operational budget;

3. On the receipts side of the operational budget, the currencies to be used in receipts will be allocated in proportion to the reserve tranche positions of those members included in the operational budget, provided that such use shall not raise the Fund’s holdings of such a member’s currency above its norm for remuneration;

4. The currencies of members with no outstanding purchases and with relatively large reserve tranche positions that were not considered sufficiently strong for inclusion in the operational budget would be used in receipts only, with their agreement;

5. The Fund will seek to maintain adequate working balances, of not less than 10 percent of quotas;

6. The Fund will review these guidelines before the end of 1991 or before the increase in quotas under the Ninth General Review will come into effect, whichever comes earlier.

E. Valuation of SDR

(a) SDR Valuation Basket

The Executive Board, having reviewed the list of the currencies, and the weights of these currencies, that determine the value of the special drawing right, in accordance with Decision No. 6631-(80/145) G/S,13 adopted September 17, 1980, decides that, with effect from January 1, 1991, the list of the currencies in the SDR valuation basket shall remain the same, and the weight of each of these currencies to be used to calculate the amount of each of these currencies in the basket will be as follows:

CurrencyWeight
(In percent)
U.S. dollar40
Deutsche mark21
Japanese yen17
French franc11
Pound sterling11

Decision No. 9549-(90/146) G/S

Octobers, 1990

(b) Amendment to Rule O-1

In accordance with Executive Board Decision No. 6631-(80/145) G/S,13 adopted September 17, 1980, Executive Board Decision No. 9549-(90/146) G/S,14 adopted October 5, 1990, and the guidelines set out in Decision No. 8160-(85/186) G/S,15 adopted December 23, 1985, Rule O-1 shall read as follows, effective January 1, 1991:

Rule O-1. The value of the SDR shall be the sum of the values of the following amounts of the following currencies:

U.S. dollar0.572
Deutsche mark0.453
Japanese yen31.8
French franc0.800
Pound sterling0.0812

Decision No. 9619-(91/1) G/S

December 31, 1990

F. Overdue Financial Obligations—Special Charges—Suspension of Application in General Resources Account

1. The Fund has reviewed Decision No. 8165-(85/189) G/TR,16 as amended.

2. The special charges on overdue repurchases and on overdue charges in the General Resources Account prescribed by Sections I and II of Decision No. 8165-(85/189) G/TR,16 as amended, shall cease to be levied on the following members:

MemberSpecified Ceiling Level as Calculated in [the staff paper]
PanamaArrears as of April 30,1990
PeruArrears as of August 31, 1989
Viet NamArrears as of December 31, 1988
ZambiaArrears as of March 15, 1991, and, effective
December 31, 1991, as of July 1, 1990

The suspension shall be effective May 1, 1991, or as of the date when the member’s overdue obligations to the Fund are equal to or below the level specified above, whichever is later.

3. The Fund will extend the suspension of special charges under paragraph 2 to any member presently in protracted arrears to the Fund as listed in the Annex to this decision if the Fund endorses a Fund-monitored or rights accumulation program for that member, or if the Fund determines that (i) the member is actively cooperating with the Fund toward the clearance of its arrears to the Fund, and (ii) the member has undertaken not to increase its overdue obligations to the Fund above a specified ceiling level. In this case, the suspension of special charges shall become effective as of the date of the Fund’s decision to add the member to the list under paragraph 2, or as of the date on which the member’s overdue obligations to the Fund are equal to or below the specified ceiling level, whichever is later.

4. If, after a suspension of special charges under paragraph 2, a member fails to make payment of any newly maturing obligation to the Fund or the equivalent thereof within ten business days of the due date of such obligation, the member shall be subject to special charges on the total of its overdue repurchases and charges in the General Resources Account to which special charges are applicable for as long as such payment is not made. In addition, such suspension shall cease as of the date on which a member fails to reduce its overdue obligations to the Fund to or below any ceiling level that becomes applicable after the effectiveness of suspension, for as long as the member’s overdue obligations to the Fund exceed that applicable ceiling level.

5. The Fund will review this decision not later than the next regular annual review of the system of special charges pursuant to Decision No. 8165-(85/189) G/TR,17 as amended.

Decision No. 9723-(91/63) G/TR

April 24, 1991

Annex List of Members in Protracted Arrears
Democratic KampucheaSomalia
LiberiaSudan
PanamaViet Nam
PeruZambia
Sierra Leone

G. Debt-and Debt-Service Reduction Operations—Early Repurchase Expectations—Amendment

1. The following section shall be inserted as Section C in Decision No. 9331-(89/167),18 adopted December 19, 1989:

C. Release of Collateral Financed with Additional Resources

7. The provisions of this section shall apply when a member has purchased additional resources to finance the establishment of a collateral, and any portion of such collateral is released, subject to the following conditions:

  • (i) the member has not fully repurchased these additional resources from the Fund; and

  • (ii) the amount of the aggregate collateral that remains after this release is less than a threshold amount equal to:

    • — the sum of outstanding disbursements to the member of additional resources from the Fund and of additional funds for debt and debt service reduction from the World Bank and from regional development banks (“outstanding additional disbursements from international financial institutions”), minus

    • — any amounts that may have been used previously by the member for further debt or debt service reduction operations in accordance with paragraph 8 below.

8. If the member has not used an amount equivalent to the difference between the threshold amount and the remaining aggregate collateral (“excess release”) for further debt or debt service reduction operations within 12 months of the release, the Managing Director shall, after consultation with the member, promptly report the matter to the Executive Board. In this report, the Managing Director shall recommend that the Executive Board decide that the member is expected to make an early repurchase, or shall recommend such other action as may be appropriate.

9. The member will inform the Fund of the release of any portion of the aggregate collateral within 5 working days of such release, and of any use of the excess release for further debt or debt-service reduction operations within 30 days of such use.

10. The Fund may decide that the member shall be expected to repurchase, within 30 days of the decision or within such longer period as the Executive Board may decide, an amount equivalent to the portion of the excess release that was financed with additional resources from the Fund. For purposes of this Section, the portion of the excess release financed with additional resources from the Fund shall be calculated by applying the same proportion to the excess release as the amount of the member’s outstanding purchases from the Fund of additional resources bears to the total amount of outstanding additional disbursements from international financial institutions to the member.

2. Decision No. 9331-(89/167)19 shall be further amended as follows:

(a) Section C shall become Section D, and paragraphs 7 to 10 of the decision shall be renumbered paragraphs 11 to 14;

(b) The phrase “paragraph 3, 6 or 10” shall be substituted for the phrase “paragraph 3 or 6” in former paragraphs 7, 8, and 9 (new paragraphs 11, 12, and 13); and

(c) The phrase “Decision No. 9331-(89/167), as amended” shall be substituted for the phrase “Decision No. 9331-(89/167)”in former paragraph 8(b) and (c) (new paragraph 12(b) and (c)).

Decision No, 9693-(91/48)

April 3, 1991

H. Fund’s Income Position

(a) Rate of Charge as of November 1, 1990

Effective November 1, 1990, the proportion of the rate of charge referred to under paragraph 3 of Decision No. 9457-(90/89),20 shall be 87.8 percent.

Decision No. 9603-(90/170)

December 10, 1990

(b) Burden Sharing—Implementation in FY 1992

Section I. Principles of “Burden Sharing”

1. The financial consequences for the Fund which stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

2. The sharing shall be applied in a simultaneous and symmetrical fashion.

Section II. Determination of the Rate of Charge

1. The rate of charge for financial year 1992 referred to in Rule I-6(4)(a) shall be adjusted in accordance with the provisions of Section IV.

2. The rate of charge in force as of the end of financial year 1992, as adjusted under Section IV, shall continue to apply subsequently unless it is otherwise decided.

Section III. Amount for Special Contingent Account 1

An amount equivalent to 5 percent of the Fund’s reserves at the beginning of the financial year shall be generated during financial year 1992 in accordance with the provisions of Section IV, and shall be placed to the Special Contingent Account 1 referred to in Decision No. 9471-(90/98),21 adopted June 20, 1990.

Section IV. Implementation of Burden Sharing

1. During financial year 1992, notwithstanding Rule I-6(4)(a) and (b) and Rule 1-10, the rate of charge referred to in Rule 1-6(4) and the rate of remuneration prescribed in Rule 1-10 shall be adjusted in accordance with the provisions of this Section.

2. (a) In order to generate the amount to be placed to the Special Contingent Account 1 in accordance with Section III, the rate of charge, and, subject to the limitation in (c), the rate of remuneration shall be adjusted, in accordance with the provisions of this paragraph, so as to produce equal amounts of income.

(b) If income from charges becomes deferred during an adjustment period as defined in (d), the rate of charge and, subject to the limitation in (c), the rate of remuneration shall be further adjusted, in accordance with the provisions of this paragraph, so as to generate, in equal amounts, an additional amount of income equal to the amount of deferred charges. For the purposes of this provision, special charges on overdue financial obligations under Decision No. 8165-(85/189) G/TR,22 adopted December 30, 1985, as amended, shall not be taken into account.

(c) No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.

(d) The adjustments under this paragraph shall be made as of May 1, 1991, August 1, 1991, November 1, 1991 and February 1, 1992:

  • — shortly after July 31 for the period from May 1 to July 31;

  • — shortly after October 31 for the period from August 1 to October 31;

  • — shortly after January 31 for the period from November 1 to January 31;

  • — shortly after April 30 for the period from February 1 to April 30;

(e) The operation of this decision shall be reviewed when the adjustment in the rate of remuneration reduces the remuneration coefficient to the limit in (c) above.

3. A midyear review of the Fund’s income position shall be held shortly after October 31, 1991. If, after any adjustment under paragraph 2, the actual net income for the first six months of the financial year, on an annual basis, is below the target amount for the year, by an amount equivalent to, or greater than, 2 percent of the Fund’s reserves at the beginning of the financial year, the Executive Board will consider how to deal with the situation. If by December 15 no agreement has been reached as a result of this consideration, the rate of charge shall be increased as of November 1 to the level necessary to reach the target amount of net income for the year.

4. (a) Subject to paragraph 3 of Decision No. 8780-(88/12),23 adopted January 29, 1988, the balances held in the Special Contingent Account 1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment, when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

(b) An amount equal to the proceeds of any adjustment for deferred charges shall be distributed, in accordance with the provisions of this paragraph, to members that have paid additional charges or have received reduced remuneration, when, and to the extent that, charges, the deferral of which had given rise to the same adjustment, are paid to the Fund. Distributions under this provision shall be made quarterly.

(c) Distributions under (a) or (b) shall be made in proportion to the amounts that have been paid or have not been received by each member as a result of the respective adjustments.

(d) If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim in accordance with Decision No. 8271-(86/74),24 adopted April 30, 1986, or any subsequent decision of the Fund.

(e) Subject to paragraph 4 of Decision No. 8780-(88/12),23 adopted January 29, 1988, if any loss is charged against the Special Contingent Account 1, it shall be recorded in accordance with the principles of proportionality set forth in (c).

Decision No. 9696-(91/49)

April 5, 1991

(c) Extended Burden Sharing—Review

Pursuant to Decision No. 9471-(90/98),25 adopted June 20, 1990, the Fund has reviewed the operation of the implementation of extended burden sharing, including the amounts of adjustments.

Decision No. 9697-91/49)

April 5, 1991

(d) Retroactive Reduction of Rate of Charge for FY 1991

Net income for financial year 1991 in excess of the target amount of 5 percent of the Fund’s reserves at the beginning of that financial year shall be used to reduce retroactively the proportion of the rate of charge to the SDR interest rate specified in paragraph 2 of Decision No. 9457-(90/89),26 adopted June 8, 1990, for the period May 1, 1990 to October 31, 1990, to 87.8 percent, and any excess amount remaining after such reduction shall be used to reduce further the proportion for the period May 1, 1990 to April 30, 1991.

Decision No. 9749-(91/77)

June 7, 1991

(e) Disposition of Net Income for FY 1991

The Fund’s net income for FY 1991, equal to SDR 69,848,835, shall be placed to the Special Reserve.

Decision No. 9750-(91/77)

June 7, 1991

(f) Net Income Target and Rate of Charge for FY 1992

1. In accordance with Rule I-6(4)(a), the target amount of net income for FY 1992 shall be 5 percent of the Fund’s reserves at the beginning of the financial year.

2. During FY 1992, and notwithstanding Rule 1-6(4), the rate of charge referred to in Rule 1-6(4) shall be a proportion of the SDR interest rate under Rule T-l.

3. Effective May 1, 1991, the proportion shall be 96.6 percent.

4. In accordance with Section IV, paragraph 3 of Decision No. 9696-(91/49),27 adopted April 5, 1991, a midyear review of the Fund’s income position shall be held shortly after October 31, 1991. At that time, the proportion of the SDR interest rate shall be reviewed on the basis of (i) the then prevailing SDR interest rate, and (ii) the revised estimated income and expense of the Fund during the year and the target amount of net income for the year. If after any adjustments under Section IV, paragraph 2, of Decision No. 9696-(91/49)27 actual net income for the first six months of the financial year, on an annual basis, is below the target amount for the year by an amount equal to, or greater than, 2 percent of the Fund’s reserves at the beginning of the financial year, the Executive Board will consider how to deal with the situation. If by December 15, 1991 no agreement has been reached as a result of this consideration, the proportion of the SDR interest rate shall be increased as of November 1, 1991 to the level necessary to reach the target amount of net income for the year.

5. When estimating income, no deduction shall be made for projected deferred income.

6. The Executive Board shall be notified, shortly after the end of each quarter, of the average rate of charge for the quarter.

Decision No. 9751-(91/77)

June 7, 1991

I. Structural Adjustment Facility, Enhanced Structural Adjustment Facility, and Enhanced Structural Adjustment Facility Trust

(a) Extension of Period for Reviews

a. The Fund decides that in Decision No. 9114-(89/40) SAF/ ESAF,28 adopted March 29, 1989, “June 30, 1990” shall be replaced by “July 31, 1990.”

b. The Fund, as Trustee, decides that in Decision No. 9119-(89/40) ESAF,29 adopted March 29, 1989, “June 30, 1990” shall be replaced by “July 31, 1990.”

Decision No. 9486-(90/105) SAF/ESAF

June 29, 1990

(b) Review of Operation

Pursuant to Decision No. 9114-(89/40) SAF/ESAF,28 adopted March 29, 1989, the Fund has reviewed the operation of the Structural Adjustment Facility, of the Enhanced Structural Adjustment Facility, and of the Enhanced Structural Adjustment Facility Trust. The operation of these facilities and of the Enhanced Structural Adjustment Facility Trust shall be further reviewed before July 31, 1991.

Decision No. 9487-(90/106) SAF/ESAF

July 2, 1990

J. Structural Adjustment Facility—Amendment

The Regulations for the Administration of the Structural Adjustment Facility, annexed to Decision No. 8238-(86/56) SAF,30 adopted March 26, 1986, as amended, shall be amended as follows:

(i) Paragraph 14(1) shall be amended to read:

(1) The amounts of such assistance shall be identified in any commitment, arrangement, or disbursement under the Enhanced Structural Adjustment Facility. They shall remain available for disbursement until the expiration of the commitment period under the three-year arrangement under the Enhanced Structural Adjustment Facility.

(ii) The following new subparagraph shall be added to paragraph 14:

(5) If a member has received loans from the Structural Adjustment Facility in conjunction with loans from the Enhanced Structural Adjustment Facility Trust, any payment made by the member for the discharge of an obligation under any such loan shall also be attributed to the obligation under the other loan having the same due date in proportion to the respective amounts of such obligations.

Decision No. 9490-(90/106) SAF

July 2, 1990

K. Enhanced Structural Adjustment Facility Trust

(a) Amendments

Section II, paragraph 2(d) of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,31 adopted December 18, 1987, as amended, shall be amended by adding the following sentence after the first sentence:

The Fund may increase, within the overall amount of resources committed under a three-year arrangement, the amount to be made available for the second disbursement under an annual arrangement to help meet adverse external contingencies occurring during the period of the arrangement.

Decision No. 9488-(90/106) ESAF

July 2, 1990

Section II, paragraph 1(d) of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,31 adopted December 18, 1987, as amended, shall be amended by substituting “1992” for “1990,” to read as follows: “(d) Commitments under three-year arrangements may be made during the period from January 1, 1988 to November 30, 1992.”

Decision No. 9555-(90/147) ESAF

September 24, 1990

(a) The following subparagraph shall be added to paragraph 1 of Section II of the Instrument to Establish the ESAF Trust (Annex to Decision No. 8759-(87/176) ESAF,31 adopted December 18, 1987, as amended), as subparagraph (e):

After the expiration of the third annual arrangement for an eligible member, the Trustee may approve an additional annual arrangement for that member, if it is satisfied that the performance of the member under the arrangement has been satisfactory and that the member has adopted appropriately strong measures in response to its external circumstances in an effort to strengthen substantially and in a sustainable manner its balance of payments position. Commitments under such additional annual arrangements shall be within the access limits determined in accordance with paragraph 2 of this Section, and may be made during the period specified in (d) above.

(b) Paragraph 2(d) of Section II of the Instrument to Establish the ESAF Trust (Annex to Decision No. 8759-(87/176) ESAF,31 as amended) shall be amended to read as follows:

The amount of resources committed to a qualifying member under a three-year arrangement and the amounts for the second-and third-year arrangements shall be reviewed at the time of the consideration of each annual program. The Fund may increase the overall amount of resources committed under a three-year arrangement, when increasing the amount to be made available for the second disbursement under an annual arrangement to help meet adverse external contingencies occurring during the period of the arrangement. The amounts committed to a member shall not be reduced because of developments in its balance of payments, unless such developments are substantially more favorable than envisaged at the time of approval of the three-year arrangement and the improvement for the member derives in particular from improvements in the external environment.

(c) Paragraph 3(c) of Section II of the Instrument to Establish the ESAF Trust (Annex to Decision No. 8759-(87/176) ESAF,32 as amended) shall be amended to read as follows:

No disbursement under any commitment to a member shall be made after the expiration of the period specified in Section III, paragraph 3.

Decision No. 9585-(90/161) ESAF

November 15, 1990

(b) Review of Access Limits

Pursuant to Section II, Paragraph 2(a) of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust, the Fund as Trustee has reviewed the maximum limit and the exceptional maximum limit on access to the resources of the Enhanced Structural Adjustment Facility Trust established by Decision No. 8845-(88/61) ESAF,33 adopted April 20, 1988. These limits shall be further reviewed not later than July 31, 1991.

Decision No. 9489-(90/106) ESAF

July 2, 1990

L. Supplementary Financing Facility Subsidy Account—Additional Subsidy Payments for May 1, 1989 Through June 30,1989 and Subsidy Payments for July 1, 1989 Through June 30,1990

1. In accordance with the Instrument establishing the Supplementary Financing Facility Subsidy Account, as amended, additional subsidy payments shall be made with respect to charges paid on holdings of currency referred to in Section 7 of the Instrument for the period May 1, 1989 through June 30, 1989, in the amount indicated to each of the eligible members as listed in Column 2 of the attachment.

2. In accordance with the Instrument establishing the Supplementary Financing Facility Subsidy Account, as amended, subsidy payments shall be made with respect to charges paid on holdings of currency referred to in Section 7 of the Instrument for the period July 1, 1989 through June 30, 1990, in the amount indicated to each of the eligible members as listed in Column 5 of the attachment.

3. The subsidy payments shall be made to each eligible member on July 25, 1990, or as soon thereafter as the member has paid all outstanding charges, if any, on balances eligible for the subsidy.

Decision No. 9510-(90/122) SBS

July 25, 1990

Attachment

SFF Subsidy Account: Approved Disbursements and Proposed Disbursements for May-June 1989 and July 1989-June 1990(In SDRs)
Cumulative

Approved
Proposed Amount of Disbursement
Cumulative

Approved

Subsidies

in Period

1981-

June 19891(1)
Additional

subsidy

May 1989-

June 1989

(2)
July-

December

1989

(3)
January

June 1990

(4)
July 1989-

June 1990

(3)+(4)

(5)
Grand

total

(2)+(5)

(6)
(a) Members eligible to receive subsidy at the full rate
Bangladesh16,347,415
Bolivia3 892,179
Dominica610,1232471,0295591,5881,835
Gambia, The645,0712981,0531,0531,351
Guyana4,662,959
India156,559,347106,047419,180216,733635,913741,960
Kenya13,837,916491491
Liberia6,255,557184184
Madagascar3,297,841
Malawi4,184,213
Mauritania2,325,289
Pakistan75,816,72713,78449,78514,85064,63578,419
Philippines49,259,335
Senegal7,784,8268761,7141,7142,590
Sierra Leone2,539,567
Sri Lanka591,705
Sudan25,363,197
Tanzania2,447,084
Togo1,074,507
Zambia3,520,127
Subtotal381,014,985121,927472,761232,142704,903826,830
(b) Members eligible to receive subsidy at half the full rate
Cote d’lvoire19,314,7559,33236,85719,52856,38565,717
Jamaica16,799,833441282282723
Mauritius5,067,060
Morocco10,226,265
Peru15,061,171
Subtotal66,469,0849,77337,13919,52856,66766,440
Total447,484,069131,700509,900251,670761,570893,270

These figures include SDR 2,535,384 withheld by the Fund pending payment of overdue SFF charges by members.—Indicates that the member has no outstanding purchases under the SFF for the period shown.

These figures include SDR 2,535,384 withheld by the Fund pending payment of overdue SFF charges by members.—Indicates that the member has no outstanding purchases under the SFF for the period shown.

See Selected Decisions, Fifteenth Issue, page 16.

Ibid., page 18.

Ibid., pages 9-14.

Ibid., pages 84-88.

Ibid., pages 89-90.

See Annual Report, 1990, pages 103-104.

See Selected Decisions, Fifteenth Issue, pages 133

Ibid.

Ibid.

See Annual Report, 1981, pages 169-71.

See Selected Decisions, Fifteenth Issue, pages 196-98.

See Annual Report, 1981, pages 169-71.

See Selected Decisions, Fifteenth Issue, pages 351-52.

See Item (a), above.

See Selected Decisions, Fifteenth Issue, page 353.

Ibid., pages 204-205.

Ibid.

Ibid., pages 6669.

Ibid.

See Annual Report, 1990, page 96.

Ibid., pages 96-97.

See Selected Decisions, Fifteenth Issue, pages 204-205

See Selected Decisions, Fifteenth Issue, pages 216-17.

Ibid., page 206.

See Annual Report, 1990, pages 96-97.

Ibid., page 96.

See Item (b), above.

28 See Selected Decisions, Fifteenth Issue, page 254.

Ibid., pages 45-46.

Ibid., pages 231-38.

Ibid., pages 23-45.

Ibid.

Ibid., page 45.

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