Chapter

APPENDIX IV Principal Policy Decisions of the Executive Board

Author(s):
International Monetary Fund
Published Date:
January 1993
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A. Surveillance Over Members’ Exchange Rate Policies

(a) Extension of Period for Reviews

In Decision No. 9499-(90/lll),1 adopted July 11, 1990 the words “July 11, 1992” shall be replaced by the words “November 22, 1992.”

Decision No. 10072-(92/85)

July 2, 1992

In Decision No. 9499-(90/lll),2 adopted July 11, 1990, as amended, the words “November 22, 1992” shall be replaced by the words “January 31, 1993.”

Decision No. 10159-(92/122)

October 7, 1992

(b) Article IV Consultation Cycles—Review of Temporary Changes

The Executive Board has reviewed the temporary shift in consultation cycles as provided for in the statement of the Chairman at [Executive Board Meeting of November 22, 1991] and decides that, effective November 22, 1992, consultations with members shall be held in accordance with Appendix I of [the staff paper].

Decision No. 10168-(92/127)

October 15, 1992

(c) Review

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 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 January 29, 1995.

2. The Executive Board 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 January 29, 1995.

3. Paragraph 3 of Decision No. 6026-(79/13),4 January 22, 1979, on the Supplemental Surveillance Procedure shall be amended to read in the following manner:

3. Supplemental Surveillance Procedure. Whenever the Managing Director considers that important economic or financial developments are likely to affect a member’s exchange rate policies or the behavior of the exchange rate of its currency, he shall initiate informally and confidentially a discussion with the member. After such discussion, the Managing Director may report to the Executive Board or informally advise the Executive Directors and, if the Executive Board considers it appropriate, an ad hoc Article IV consultation between the member and the Fund shall be conducted. An ad hoc Article IV consultation shall be subject to the procedures for completion of interim consultations set out in Decision No. 9637-(91/15),5 February 8, 1991.

Decision No. 10273-(93/15)

January 29, 1993

(d) Biennial Review of the Fund’s Surveillance Policy—Termination of Bicyclic Consultation Procedure

The bicyclic consultation procedure shall be terminated and each member currently on the bicyclic procedure shall be immediately placed on the standard 12-month cycle; the first consultation with each such member that is completed after the adoption of this decision shall be conducted in accordance with the procedures that apply to consultations under the standard 12-month cycle, and the deadline for completion that applied under the bicyclic procedure shall continue to apply to such consultation.

Decision No. 10362-(93/67)

May 10, 1993

(e) 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.

Decision No. 10363-(93/67)

May 10, 1993

(f) Supplemental Surveillance Procedures—Amendment

Paragraph 3 of Decision No. 6026-(79/13),4 adopted January 22, 1979, as amended on the Supplemental Surveillance Procedures shall be amended to read in the following manner:

3. Supplemental Surveillance Procedures

(a) Whenever the Managing Director considers that important economic or financial developments are likely to affect a member’s exchange rate policies or the behavior of the exchange rate of its currency, he shall initiate informally and confidentially a discussion with the member. After such discussion the Managing Director may report to the Executive Board or informally advise the Executive Directors and, if the Executive Board considers it appropriate, an ad hoc Article IV consultation between the member and the Fund shall be conducted in accordance with the procedure set out in subparagraph (b) below.

(b) A staff report will be circulated to the Executive Directors under cover of a note from the Secretary specifying a tentative date for Executive Board discussion which will be at least 15 days later than the date upon which the report is circulated. The Secretary’s note will also set out a draft decision taking note of the staff report and completing the ad hoc consultation without discussion or approval of the views contained in the report; the decision will be adopted upon the expiration of the two-week period following the circulation of the staff report to the Executive Directors unless, within such period, there is a request from an Executive Director or a decision of the Managing Director to place the report on the agenda of the Executive Board. If the staff report is placed on the agenda, the Executive Board will discuss the report and will reach conclusions which will be reflected in a summing up.

(c) Unless otherwise decided by the Executive Board, the conduct of an ad hoc consultation with a member will not affect the consultation cycle applicable to the member or the deadline for completion of the next consultation with the member.

Decision No. 10364-(93/67)

May 10, 1993

(g) Biennial Review of the Fund’s Surveillance Policy—Midterm Reviews Under Enhanced Surveillance

The midterm review of a member’s economic policy program under enhanced surveillance shall be conducted in accordance with the following procedure. A staff report will be circulated to the Executive Directors under cover of a note from the Secretary specifying a tentative date for Executive Board discussion which will be at least 15 days later than the date upon which the report is circulated. The Secretary’s note will also set out a draft decision taking note of the staff report and completing the review without discussion or approval of the views contained in the report; the decision will be adopted upon the expiration of the two-week period following the circulation of the staff report to the Executive Directors unless, within such period, there is a request from an Executive Director or a decision of the Managing Director to place the report on the agenda of the Executive Board. If the staff report is placed on the agenda, the Executive Board will discuss the report and will reach conclusions which will be reflected in a summing up.

Decision No. 10365-(93/67)

May 10, 1993

B. Access Policy

(a) Guidelines on Access Limits

1. The Fund, having reviewed Decisions No. 6783-(81/40),6 adopted March 11, 1981, as amended, No. 7600-(84/3),7 adopted January 6, 1984, as amended, and No. 9546-(90/145),8 adopted September 17, 1990, as amended, and having noted that, upon the fulfillment of the requirement for effectiveness of increases in quotas under the Ninth General Review of Quotas specified by paragraph 3 of the Resolution of the Board of Governors No. 45-2, it may no longer approve stand-by or extended arrangements under the Enlarged Access Policy, decides that, after that date, access by members to the Fund’s general resources under the credit tranches and the extended Fund facility shall be subject to an annual limit of 68 percent of quota and a cumulative limit of 300 percent of quota, net of scheduled repurchases. These limits shall not be regarded as targets. Within these limits, the amount of access in individual cases will vary according to the circumstances of the member in accordance with criteria established by the Executive Board. The Fund may approve stand-by or extended arrangements that provide for amounts in excess of these access limits in exceptional circumstances.

2. The guidelines and the access limits are intended to be temporary. Therefore, they will be reviewed not later than October 29, 1993 and annually thereafter in light of all relevant factors, including the magnitude of members’ payments problems and developments in the Fund’s liquidity.

Decision No. 10181-(92/132)

November 3, 1992

(b) Access Limits Under Special Facilities

Upon the fulfillment of the requirement for effectiveness of increases in quotas under the Ninth General Review of Quotas specified by paragraph 3 of the Resolution of the Board of Governors No. 45-2:

(a) The percentages of a member’s quota referred to in Decision No. 8955-(88/126),9 adopted August 23, 1988, as amended, on the establishment of the compensatory and contingency financing facility, shall be changed as follows:

  • —in paragraph 8(a)(i), 105 percent shall be changed to 80 percent;

  • —in paragraph 8(a)(ii), 83 percent and 40 percent shall be changed to 65 percent and 30 percent, respectively;

  • —in paragraph 8(a)(iii), 40 percent shall be changed to 30 percent;

  • —in paragraph 8(a)(iv), 83 percent and 17 percent shall be changed to 65 percent and 15 percent, respectively;

  • —in paragraph 8(a)(v), the references to 83 percent and 57 percent shall be deleted;

  • —in paragraph 8(a)(vi), 122 percent shall be changed to 95 percent;

  • —in paragraph 8(b), 40, 17, and 25 percent shall be changed to 30, 15, and 20 percent, respectively, and the reference to 57 percent shall be deleted;

  • —in paragraphs 12(a)(i) and 12(a)(ii), respectively, 40 percent shall be changed to 30 percent, and 65 percent to 50 percent;

  • —in paragraphs 12(b)(i), 12(b)(ii), and 12(b)(iii), respectively, 20 percent shall be changed to 15 percent, 40 percent to 30 percent, and 65 percent to 50 percent;

  • —in paragraph 12(c), 83 percent shall be changed to 65 percent;

  • —in paragraph 21(a), 35 percent shall be changed to 25 percent;

  • —in paragraph 23, 40 percent shall be changed to 30 percent;

  • —in paragraphs 36(b)(i), 36(b)(ii), 36(c)(i), and 36(c)(ii), 17 percent and 42 percent shall be changed to 15 percent and 35 percent, respectively;

  • —in paragraph 37(a), 105 percent shall be changed to 80 percent;

  • —in Section V, on the compensatory financing of fluctuations in the cost of oil imports, all the references to percentages of a member’s quota shall be deleted.

(b) The percentage in paragraph 2 of Decision No. 2772-(69/47),10 adopted June 25, 1969, as amended, on the buffer stock financing facility, shall be changed from 45 percent to 35 percent.

Decision No. 10183-(92/132)

November 3, 1992

(c) Elimination of Floating

Buffer Stock Financing Facility

a. Except for the purpose of determining the level of conditionality applied to purchases in the credit tranches, the Fund’s holdings of a member’s currency resulting from purchases under Decision No. 2772-(69/47),10 adopted June 25, 1969, as amended, on the buffer stock financing facility, shall be considered separate from the Fund’s holdings of the same currency resulting from purchases under any other policy on the use of the Fund’s general resources. In cases of concurrent requests for purchases under Decision No. 2772-(69/47)10 and purchases in the credit tranches, purchases under Decision No. 2772-(69/47)10 shall be deemed to be made first.

Extended Fund Facility

b. Decision No. 4377-(74/114),11 adopted September 13, 1974, as amended, on the extended Fund facility, shall be further amended by deleting the second sentence of Section II, paragraph 4(b).

Borrowed and Substituted Resources Under Enlarged Access Policy

c. For purposes of determining the level of conditionality applied to purchases in the credit tranches, the Fund will take into account its holdings of a member’s currency resulting from purchases made with borrowed resources under Decision No. 6783-(81/40),12 adopted March 11, 1981, as amended, and with substituted resources in accordance with Decision No. 9546-(90/145),13 adopted September 17, 1990, as amended.

Compensatory and Contingency Financing Facility

d. Decision No. 8955-(88/126),14 adopted August 23, 1988, as amended, on the establishment of the compensatory and contingency financing facility, shall be amended further by replacing paragraph 4 of Section I by the following:

4. Except for the purpose of determining the level of conditionality applied to purchases in the credit tranches, the Fund’s holdings of a member’s currency resulting from purchases under any of the policies set forth in this Decision shall be considered separate from the Fund’s holdings of the same currency resulting from purchases under any other policy on the use of the Fund’s general resources. In cases of concurrent requests for purchases under any Section of this Decision and for purchases in the credit tranches, purchases under this Decision shall be deemed to be made first.

Decision No. 10186(92/132)

November 3, 1992

C. Compensatory and Contingency Financing Facility

(a) Review—Extension of Deadline

The Fund shall review the Decision on the Compensatory and Contingency Financing Facility (Decision No. 8955-(88/126),14 adopted August 23, 1988, as amended) not later than December 31, 1992.

Decision No. 10071-(92/85)

July 2, 1992

The Fund shall review the Decision on the Compensatory and Contingency Financing Facility (Decision No. 8955-(88/126),14 adopted August 23, 1988, as amended) not later than March 31, 1993.

Decision No. 10263-(93/1)

December 31, 1992

(b) Amendments

Decision No. 8955-(88/126),14 adopted August 23, 1988, as amended, shall be further amended as follows:

1. The following sentence shall be added at the end of paragraph 9:

, and, having regard to the outstanding financial obligations of the member to the Fund, may reduce the amount of financing accordingly, notwithstanding any other provision in this Decision.

2. The following subparagraph (f) shall be added in paragraph 12:

Whenever estimated data are used for 9 months or more of the 12-month period referred to in paragraph 14, an amount of compensatory financing, determined in accordance with this Decision as an amount to be purchased under this Section, shall be phased in two purchases in accordance with this subparagraph. The two purchases shall be governed by the provisions of this subparagraph. The member may expect that its request for the first purchase, which shall be for up to 65 percent of the amount of compensatory financing, shall be met immediately. The member may expect that its request for the second purchase, which shall be for up to the difference between (i) the amount of compensatory financing recalculated at the time of the request for the second purchase and (ii) the amount of the first purchase, shall be met after actual data become available for at least 6 months of the 12-month period, provided that:

  • —the 12-month period shall be the same as for the first purchase and the second purchase shall be subject to the provisions of subparagraph (g) below,

  • —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 first purchase and the second purchase requested by the member would cause the Fund’s holdings of the member’s currency resulting from purchases under this Section to exceed the limit in this paragraph under which the first purchase was made, the second purchase shall be subject to the relevant provisions of subparagraphs (a), (b), and (c) above instead of the provisions of this subparagraph.

3. The following subparagraph (g) shall be added in paragraph 12:

A purchase under this Section shall not be approved later than 6 months after the end of the 12-month period referred to in paragraph 14, provided that it may be approved up to 7 months after the end of such period if the delay beyond 6 months is the result of circumstances external to the member.

4. The following sentence shall be added at the end of paragraph 15:

If, in the opinion of the Fund, adequate data are available for this purpose, the calculations and estimates under this paragraph of earnings from an export item shall, with respect to a purchase on account of an export shortfall under this Section or Section IV, be made net of the value of imported intermediate inputs, where such value exceeds 50 percent of the gross earnings from the export item and the exclusion of the value of the export item would increase or reduce by at least 10 percent the amount that could otherwise be purchased on account of the export shortfall.

5. The following sentence shall be added at the end of paragraph 16(a):

The calculation of such an excess with respect to a purchase shall be made on the basis of the same post-shortfall year projections used for the calculation of the purchase, provided that if the member has made more than one purchase with respect to the same 12-month period, the calculation of any excess with respect to all such purchases will be made on the basis of the post-shortfall year projections used for the latest of such purchases.

6. The following subparagraph (c) shall be added in paragraph 16:

Provision shall be made in stand-by and extended arrangements for the suspension of further purchases under the arrangement whenever a member fails to meet a repurchase expectation pursuant to subparagraph (a) above. Furthermore, the Managing Director shall not recommend for approval, and the Fund shall not approve, a request for the use of the Fund’s general resources by a member that is failing to meet such an expectation.

7. Paragraphs 18 to 27 shall be deleted and the following paragraphs 18 to 22 shall be added:

18. (a) A decision by the Fund that it will be prepared to provide financing under paragraph 17 may be taken only in association with a Fund arrangement which provides that adjustments to performance criteria under the arrangement, including the performance criterion pertaining to international reserves, shall be made automatically in accordance with subparagraph (b) below in the event that deviations in the member’s balance of payments due to external contingencies occur during the period of the program supported by the arrangement. With respect to arrangements under the Structural Adjustment Facility, references in this Section to performance criteria shall be understood to be to benchmarks under such arrangements.

(b) The automatic adjustments to performance criteria contemplated in subparagraph (a) above will be made in accordance with the terms specified in the arrangement, which shall include the external contingencies that will be taken into account and such other modalities as the Fund may determine. The external contingencies shall relate to key external variables of the member’s current account that are highly volatile and easily identifiable.

19. (a) When deciding that it will be prepared to provide financing under paragraph 17, the Fund shall specify the maximum amount of purchases under this Section that may be permitted in association with the arrangement in case of unfavorable deviations and the maximum amount by which the arrangement could be reduced in accordance with paragraph 22 in the case of a favorable deviation. These two maximum amounts will normally be the same.

(b) The maximum amount of purchases under this Section that may be made in association with a Fund arrangement will generally not exceed 70 percent of the amount of the arrangement.

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

20. (a) The Fund may provide financing under this Section only if:

  • (i) an automatic adjustment to the performance criterion pertaining to international reserves under the Fund arrangement for the member has occurred as contemplated in paragraph 18 as a result of an unanticipated unfavorable deviation in the member’s balance of payments;

  • (ii) the deviation referred to in subparagraph (i) above is outside the control of the member;

  • (iii) the member’s performance under the associated Fund arrangement is satisfactory;

  • (iv) 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; and

  • (v) the program supported by the associated Fund arrangement continues to be adequately financed which, if necessary, may include the provision of financing from other sources.

(b) Financing under this Section shall be provided generally on the basis of a review by the Executive Board.

(c) The amount of financing shall be equal to the amount of the adjustment to the performance criterion pertaining to international reserves contemplated in paragraph 18(a), provided that:

  • (i) the amount of financing shall be subject to the maximum amount of purchases specified pursuant to paragraph 19(a);

  • (ii) the amount of financing shall not exceed the amount by which the member’s actual balance of payments position at the end of the period with respect to which contingency financing is requested is less favorable than projected in the member’s program supported by the associated arrangement; and

  • (iii) the Fund’s holdings of the member’s currency resulting from purchases under this Section on account of deviations in net interest costs in association with all Fund arrangements for the member shall not exceed 25 percent of the member’s quota.

(d) For purposes of applying the limitation in subparagraph (c)(iii) above, when a purchase to be made under this Section is attributable to unfavorable deviations in net interest costs and in one or more other variables relating to external contingencies, the purchase shall be allocated between the deviation in net interest costs and the other deviations. The portion that is to be allocated to the deviation in net interest costs shall be determined on the basis of the share of such deviation in the sum of the deviations.

(e) When, at the request of a member, the Fund has decided to provide financing to the member under this Section that would cause the Fund’s holdings of the member’s currency resulting from purchases under this Section to exceed 30 percent of the member’s quota, the amount of such excess over 30 percent of quota shall not be available under paragraph 8(b), in respect of the arrangement in association with which the Fund decides to provide such financing, for other purchases under this Decision, unless the member notifies the Fund that it will not avail itself of such financing in excess of 30 percent under this Section.

21. Purchases under this Section shall be subject to the observance of any applicable performance criteria or other conditions specified in the associated arrangement, as if such purchases were drawings to be made under that arrangement. Purchases under this Section may be phased as specified by the Fund.

22. (a) If an automatic adjustment to a member’s performance criteria pertaining to international reserves has occurred as contemplated in paragraph 18 as a result of a favorable deviation in the member’s balance of payments, the Fund may, taking into account the member’s level of international reserves, decide to reduce the amount of the arrangement by an amount up to the difference between the deviation and the automatic adjustment, but not exceeding the maximum amount specified pursuant to paragraph 19(a) or the amount that would have been financed under this Section if the deviation had been unfavorable.

(b) When one or more purchases under this Section has earlier been made by the member, 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.

8. The following subparagraph (g) shall be added in paragraph 36:

Whenever estimated data are used for 9 months or more of the 12-month period referred to in paragraph 32, an amount of compensatory financing, determined in accordance with this Decision as an amount to be purchased under this Section, shall be phased in two purchases in accordance with this subparagraph. The two purchases shall be governed by the provisions of this subparagraph. The member may expect that its request for the first purchase, which shall be for up to 65 percent of the amount of compensatory financing, shall be met immediately. The member may expect that its request for the second purchase, which shall be for up to the difference between (i) the amount of compensatory financing recalculated at the time of the request for the second purchase and (ii) the amount of the first purchase, shall be met after actual data become available for at least 6 months of the 12-month period, provided that:

  • —the 12-month period shall be the same as for the first purchase and the second purchase shall be subject to the provisions of subparagraph (h) below,

  • —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 first purchase and the second purchase requested by the member would cause the Fund’s holdings of the member’s currency resulting from purchases under this Section to exceed the limit in this paragraph under which the first purchase was made, the second purchase shall be subject to the relevant provisions of subparagraphs (b), (c), and (d) above instead of the provisions of this subparagraph.

9. The following subparagraph (h) shall be added in paragraph 36:

A purchase under this Section shall not be approved later than 6 months after the end of the 12-month period referred to in paragraph 32, provided that it may be approved up to 7 months after the end of such period if the delay beyond 6 months is the result of circumstances external to the member.

10. The following sentence shall be added at the end of paragraph 38(a):

The calculation of such an excess with respect to a purchase shall be made on the basis of the same post-shortfall year projections used for the calculation of the purchase, provided that if the member has made more than one purchase with respect to the same 12-month period, the calculation of any excess with respect to all such purchases will be made on the basis of the post-shortfall year projections used for the latest of such purchases.

11. The following subparagraph (c) shall be added in paragraph 38:

Provision shall be made in stand-by and extended arrangements for the suspension of further purchases under the arrangement whenever a member fails to meet a repurchase expectation pursuant to subparagraph (a) above. Furthermore, the Managing Director shall not recommend for approval, and the Fund shall not approve, a request for the use of the Fund’s general resources by a member that is failing to meet such an expectation.

12. Paragraph 61 shall be amended to read as follows:

The Fund will review this Decision not later than January 13, 1996.

13. Paragraphs 28 to 61 of the CCFF decision, and the corresponding references to these paragraphs in the CCFF decision, shall be renumbered as paragraphs 23 to 56.

Decision No. 10398-(93/89)

June 23, 1993

D. General Arrangements to Borrow

(a) Amendment

1. In light of Switzerland’s membership in the Fund, Decision No. 1289-(62/1)15 on the General Arrangements to Borrow, as amended, is further amended by deleting its paragraph 22, as indicated in the revised text in the attachment to [the staff paper].

2. This amendment shall become effective when all eleven participants have notified the Fund in writing, not later than December 24, 1992, or such later date as may be prescribed by the Executive Board, that they concur in the amendment.

Decision No. 10175-(92/129)

October 28, 1992

(b) Renewal

Executive Board Decision No. 1289-(62/1)15 on the General Arrangements to Borrow, as amended, is hereby renewed for a period of five years from December 26, 1993.

Decision No. 10176-(92/129)

October 28, 1992

(c) Borrowing Agreement Between Saudi Arabia and Fund—Renewal

Pursuant to Article VII, Section 1 of the Articles of Agreement, the Managing Director is authorized to send to the Minister of Finance of Saudi Arabia a letter as set forth in the attachment…, proposing a further renewal, for a period of five years from December 26, 1993, of the 1983 borrowing agreement with Saudi Arabia in association with the General Arrangements to Borrow. When a reply is received from the Minister accepting the proposal, the Managing Director’s letter and the reply shall constitute an agreement on the further renewal of the 1983 borrowing agreement between Saudi Arabia and the Fund, which shall enter into force on December 26, 1993.

Decision No. 10235-(92/149)

December 10, 1992

Attachment

Your Excellency,

I refer to the borrowing agreement between the International Monetary Fund (the Fund) and Saudi Arabia in association with the General Arrangements to Borrow (GAB), which entered into force on December 26, 1983, and was renewed for a period of five years from December 26, 1988 (henceforth referred to as the 1983 borrowing agreement). Pursuant to Executive Board Decision No. 10235-(92/149) adopted December 10, 1992, I have been authorized to propose on behalf of the Fund that Saudi Arabia agree to a further renewal of the 1983 borrowing agreement on the same terms and conditions as set forth therein, for a period of five years from December 26, 1993.

If the foregoing proposal is acceptable to Saudi Arabia, this communication and your reply indicating Saudi Arabia’s acceptance shall constitute an agreement between Saudi Arabia- and the Fund on a further renewal of the 1983 borrowing agreement, which shall enter into force on December 26, 1993.

With kind regards,

Yours sincerely,

Michel Camdessus

H.E. Sheikh Mohammad Abalkhail

Minister of Finance and National Economy

P.O. Box 6099

Riyadh 11177

Saudi Arabia

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

The Executive Board decides that the guidelines regarding the use of currencies in the operational budget as set out… [in] Decision No. 9480-(90/103),16 adopted June 27, 1990 shall continue to apply until January 31, 1993.

Decision No. 10187-(92/132)

October 30, 1992

The Executive Board approves the operational guidelines set out below:

a. 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 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 two thirds 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 United States dollar);

b. 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, in relation to quota, close to the average level of the Fund’s holdings of currencies of other members in relation to quotas that are sufficiently strong to be included in the operational budget;

c. 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;

d. 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;

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

f. The operation of the guidelines will be periodically reported to the Executive Board in the context of the quarterly operational budget; any proposals for modification of the guidelines will be presented to the Executive Board for its consideration. The guidelines will be reviewed by the Executive Board not later than February 10, 1995.

Decision No 10279-(93/19)

February 10, 1993

F. Level of Fund SDR Holdings—Review

In determining the amounts of SDRs to be transferred in purchases and operational payments under the operational budgets, the Fund will be guided by the aim of reducing the Fund’s SDR holdings to within a range of SDR 1.0-1.5 billion by end-1995. The Executive Board will be informed of the evolution of the Fund’s holdings of SDRs on a regular basis in the context of the quarterly operational budget.

Decision No. 10278-(93/19) S

February 10, 1993

G. Overdue Financial Obligations

(a) Modalities of Gold Pledge for Use of ESAF Trust Resources Under Rights Approach

1. As long as loans from the Enhanced Structural Adjustment Facility Trust (hereinafter the “ESAF Trust”) to members for the financing of “rights” as defined in the Managing Director’s Summing Up at… [Executive Board Meeting] of June 20, 1990 are outstanding, the Fund shall review the adequacy of the Reserve Account of the ESAF Trust (hereinafter the “Reserve Account”) shortly before June 30 and December 31 of each year.

2. The Fund shall determine whether the amounts held in the Reserve Account, plus other available means of financing that would effectively restore the resources of the Trust, are sufficient to meet all obligations which could give rise to a payment from the Reserve Account to lenders to the Loan Account of the ESAF Trust in the six months following a review under paragraph 1. To the extent that it is determined by the Fund that these resources are insufficient to meet all such obligations (the “potential shortfall”), then the Managing Director is hereby authorized and instructed to sell gold held in the General Resources Account of the Fund in an amount that would generate proceeds available for transfer to the Special Disbursement Account under Article V, Section 12(f), up to the equivalent of the potential shortfall in the Reserve Account provided that

(i) these proceeds shall not exceed the equivalent of the previous drawings on the Reserve Account attributable to obligations under loans from the ESAF Trust to members for overdue the financing of rights as described above, plus forgone interest earnings on amounts equivalent to these drawings, and less any amounts corresponding to these drawings that have been subsequently paid by such members or for which the Reserve Account has previously been replenished from the proceeds of a gold sale under this decision; and

(ii) the total amount of gold available for sale under this decision shall not exceed the amount specified in paragraph 4.

3. The proceeds of any sale of gold under this decision in excess of an amount equivalent at the time of the sale to one special drawing right per 0.888 671 gram of fine gold shall be placed in the Special Disbursement Account and shall be transferred immediately thereupon to the Reserve Account.

4. Subject to paragraphs 5, 6, and 7, the Fund shall retain full ownership of holdings of gold of 3 million ounces in the General Resources Account, less any amounts sold pursuant to this decision, as long as loans from the ESAF Trust to members for the financing of rights as described above remain outstanding.

5. The need to maintain the full amount specified in paragraph 4 available for sale shall be reassessed on the occasion of the reviews under paragraph 1. This amount shall not be reduced without the consent of all lenders to the Loan Account of the ESAF Trust.

6. This decision shall not be amended by the Fund except with the consent of all lenders to the Loan Account of the ESAF Trust.

7. This decision shall be terminated (i) when after all loans that may be made from the ESAF Trust have been fully disbursed, the resources held in the Reserve Account exceed the amounts outstanding under ESAF Trust loans, or (ii) when after all loans that may be made from the ESAF Trust for the financing of rights as described above have been fully disbursed, there are no outstanding obligations under such ESAF Trust loans, with respect to which a gold sale can be made under this decision, whichever is earlier.

Decision No. 10286-(93/23) ESAF

February 22, 1993

(b) Special Charges—Review

The Fund has reviewed Decision No. 8165-(85/189) G/TR,17 as amended.

Decision No. 10336-(93/49) G/TR

April 9, 1993

(c) Special Charges—Amendment

The following phrase shall be deleted from the first sentence of paragraph I.2 of Decision No. 8165-(85/189) G/TR,17 as amended:

“resulting from purchases of the Fund’s ordinary resources.”

Decision No. 10337-(93/49) G/TR

April 9, 1993

The following sentence shall be added to Section IV of Decision No. 8165-(85/189) G/TR,18 as amended:

Effective May 1, 1993, special charges under Section III above shall not be levied on overdue obligations of a member that is overdue for six months or more in meeting any financial obligation to the Fund subject to special charges under Section III above.

Decision No. 10352-(93/49) G/TR

April 9, 1993

H. Fund’s Income Position

(a) Rate of Charge—Amendment

Effective May 1, 1993, the rate of.charge established in accordance with Rule I-6(4) shall also apply to (i) holdings acquired as a result of purchases made with supplementary financing under Executive Board Decision No. 5508-(77/127)19; and to (ii) holdings acquired as a result of purchases of borrowed currency under the Policy on Enlarged Access to the Fund’s Resources under Executive Board Decision No. 6783-(81/40).20

Decision No. 10224-(92/147)

December 9, 1992

(b) Burden Sharing—Implementation in FY 1994

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 1994 referred to in Rule I-6(4) and Rule I-7(5)(a) shall be adjusted in accordance with the provisions of Section IV.

2. The rate of charge referred to in Rule I-6(4) in force as of the end of financial year 1994, 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 1994 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 1994, notwithstanding Rule I-6(4)(a) and (b), Rule I-7(5)(a), and Rule I-10 the rate of charge referred to in Rule I-6(4) and Rule I-7(5)(a), and the rate of remuneration prescribed in Rule I-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,18 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, 1993, August 1, 1993, November 1, 1993, and February 1, 1994:

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, 1993. 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 referred to in Rule I-6(4) 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),22 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) Distribution under (a) and (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),23 adopted April 30, 1986, or any subsequent decision of the Fund.

(e) Subject to paragraph 4 of Decision No. 8780-(88/12),24 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. 10340-(93/54)

April 14, 1993

(c) Extended Burden Sharing—Implementation

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

2. Effective May 1, 1993, the words “by 0.35 percentage point” in paragraph 2(a) of Decision No. 9471-(90/98),25 adopted June 20, 1990, as amended, shall be replaced by the words “by 0.26 percentage point.”

Decision No. 10341-(93/54)

April 14, 1993

(d) Disposition of Net Income for FY 1993

The Fund’s net income for FY 1993, equal to SDR 70,570,763, shall be placed to the Special Reserve.

Decision No. 10390-(93/86)

June 21, 1993

(e) Net Income Target for FY 1994 and Rate of Charge on Use of Fund Resources

1. The target amount of net income for FY 1994 shall be 5 percent of the Fund’s reserves at the beginning of the financial year plus the shortfall from the income target in FY 1993.

2. Effective May 1, 1993, notwithstanding Rule I-6(4), the rate of charge referred to in Rule I-6(4) shall be determined as a proportion of the SDR interest rate under Rule T-1. The proportion shall be determined on the basis of the then prevailing SDR interest rate, the estimated income and expense of the Fund during the year, and the target amount of net income for the year.

3. Effective May 1, 1993, the proportion shall be 111.0 percent.

4. In accordance with Section IV, paragraph 3 of Decision No. 10340-(93/54),26 adopted April 14, 1993, a midyear review of the Fund’s income position shall be held shortly after October 31, 1993. If, after any adjustments under Section IV, paragraph 2 of Decision No. 10340-(93/54),26 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 proportion of the SDR interest rate shall be increased as of November 1 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. 10391-(93/86)

June 21, 1993

I. Extended Fund Facility—Amendment

Upon the fulfillment of the requirement for effectiveness of increases in quotas under the Ninth General Review of Quotas specified by paragraph 3 of the Resolution of the Board of Governors No. 45-2, Decision No. 4377-(74/114),27 adopted September 13, 1974, as amended, shall be amended further by deleting Section II, paragraph 4(a), and the reference to that paragraph in Section II, paragraph 4(b).

Decision No. 10182-(92/132)

November 3, 1992

J. Structural Adjustment Facility, Enhanced Structural Adjustment Facility, and Enhanced Structural Adjustment Facility Trust—Review of Operation

Pursuant to Decision No. 9808-(91/114) SAF/ESAF,28 adopted September 4, 1991, 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 not later than July 10, 1993.

Decision No. 10089-(92/94) SAF/ESAF

July 23, 1992

K. Structural Adjustment Facility

(a) Review of Potential Access

Pursuant to paragraph 4(1) of the Regulations for the Administration of the Structural Adjustment Facility within the Special Disbursement Account (Annex to Decision No. 8238-(86/56) SAF,29 as amended), the Fund determines that the potential access of each eligible member to the resources of the facility established by Decision No. 8240-(86/56) SAF,30 adopted March 26, 1986, as amended, continues to be adequate. The potential access under the facility shall be further reviewed before the increase in quotas under the Ninth General Review becomes effective in accordance with paragraph 3 of Board of Governors Resolution No. 45-2, adopted effective June 28, 1990, and in any event not later than July 10, 1993.

Decision No. 10090-(92/94) SAF

July 23, 1992

(b) Amendment to Regulations

Paragraph 14 of the Regulations for the Administration of the Structural Adjustment Facility annexed to Decision No. 8238-(86/56) SAF,29 adopted March 26, 1986, as amended, shall be further amended as follows:

(i) The second sentence of subparagraph (1) shall be substituted by the following:

They shall remain available for disbursements until the expiration of any commitment under the Enhanced Structural Adjustment Facility.

(ii) Subparagraph (5) shall become subparagraph (6) and the following new subparagraph (5) shall be added:

(5) If a three-year commitment to an eligible member has expired with undrawn amounts, the Fund may approve a new commitment for that member, subject to these Regulations, provided that the member submits a three-year macroeconomic and structural adjustment program and that the amount of resources that could be made available under the new commitment shall not exceed the undrawn amounts under the expired commitment. The new commitment may be made under a one-year or a two-year arrangement, as the case may be, with annual access to be determined on the basis of the strength of the member’s program and its balance of payments need.

Decision No. 10093-(92/94) SAF

July 23, 1992

(c) Access Limits

Upon the fulfillment of the requirement for effectiveness of increases in quotas under the Ninth General Review of Quotas specified by paragraph 3 of the Resolution of the Board of Governors No. 45-2, the percentages of quota referred to in paragraph 2 of Decision No. 8240-(86/56) SAF,30 adopted March 26, 1986, as amended, on access under the structural adjustment facility, shall be changed as follows:

  • —70 percent shall be changed to 50 percent;

  • —20 percent shall be changed to 15 percent; and

  • —30 percent shall be changed to 20 percent,

provided that, notwithstanding paragraph 4(3) of Decision No. 8238-(86/56) SAF,29 adopted March 26, 1986, as amended, the SDR amount under three-year commitments in effect at the time this Decision becomes effective shall not be reduced as a consequence of such changes.

Decision No. 10184-(92/132) SAF

November 3, 1992

(d) Use of Resources of Special Disbursement Account-Regulations for Administration—Amendment

The following sentence shall be added at the end of paragraph 7, subparagraph (1) of the Regulations on the Structural Adjustment Facility annexed to Decision No. 8238-(86/56) SAF,29 as amended:

Effective May 1, 1993, such additional interest shall not be levied on overdue obligations of a member that is overdue for six months or more in meeting any financial obligation to the Fund subject to additional interest under this paragraph.

Decision No. 10353-(93/49) SAF

April 9, 1993

L. Enhanced Structural Adjustment Facility—Access Limits

Upon the fulfillment of the requirement for effectiveness of increases in quotas under the Ninth General Review of Quotas specified by paragraph 3 of the Resolution of the Board of Governors No. 45-2, the percentages of quota referred to in paragraphs 1 and 2 of Decision No. 8845-(88/61) ESAF,31 adopted April 20, 1988, as amended, on access under the enhanced structural adjustment facility, shall be as follows:

  • —250 percent shall be changed to 190 percent, and

  • —350 percent shall be changed to 255 percent.

Decision. No. 10185-(92/132) ESAF

November 3, 1992

M. Enhanced Structural Adjustment Facility Trust

(a) Review of Access Limits

Pursuant to Decision No. 9810-(91/114) ESAF,32 adopted September 4, 1991, 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 before the increase in quotas under the Ninth General Review becomes effective in accordance with paragraph 3 of Board of Governors Resolution No. 45-2, adopted effective June 28, 1990, and in any event not later than July 10, 1993.

Decision No. 10091-(92/94) ESAF

July 23, 1992

(b) Instrument—Amendment

The Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,34 adopted December 18, 1987, as amended, shall be further amended as follows:

(i) In Section II, paragraph 1(d), “1993” shall be substituted for “1992,” to read as follows:

(d) Commitments under three-year arrangements may be made during the period from January 1, 1988 to November 30, 1993.

(ii) A new subparagraph shall be added to Section II, paragraph 1, as follows:

(f) The provisions of (c) and (d) above on three-year arrangements shall also apply to new commitments under paragraph 14(5) of the Regulations for the Administration of the Structural Adjustment Facility.

Decision No. 10092-(92/94) ESAF

July 23, 1992

A subparagraph (e) shall be added to Section V, paragraph 1 of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,34 adopted December 18, 1987, as amended, to read as follows:

(e) transfers by the Fund from the Special Disbursement Account in accordance with Decision No. 10286-(93/23) ESAF, adopted February 22, 1993.

As a consequence, “and” shall be moved from the end of subparagraph (c) to the end of subparagraph (d).

Decision No. 10287-(93/23) ESAF

February 22, 1993

N. Systemic Transformation Facility

1. (a) Until December 31, 1994, the Fund will be prepared to provide financial assistance in accordance with the terms of this Decision to members that are experiencing balance of payments difficulties as a result of severe disruptions in their traditional trade and payment arrangements that are manifested by (i) a sharp fall of total export receipts due to a shift from significant reliance on trading at nonmarket prices to multilateral, market-based trade, (ii) a substantial and permanent increase in net import costs, due to a shift from significant reliance on trading at nonmarket prices toward world market pricing, particularly for energy products, or (iii) a combination of both.

(b) For purposes of this Decision, disruptions in a member’s trade and payments arrangements shall be deemed to be “severe” when they are estimated to be at least equivalent to 50 percent of quota.

2. Financing under this Decision for the balance of payments difficulties stemming from the disruptions described in paragraph 1 above shall not exceed 50 percent of the member’s quota and shall be provided in two purchases. Each purchase shall be equal to 50 percent of the member’s access as determined under this Decision.

3. (a) A member may expect that its request for a first purchase under this Decision will be met immediately, if the Fund is satisfied that the member will cooperate with the Fund in an effort to find appropriate solutions to its balance of payments difficulties, based on:

  • (i) a written statement submitted by the member

    • —describing the policies and measures that the member intends to pursue for the next 12 months, including, as appropriate, the steps taken or to be taken to put in place the basic institutions of economic management in a market-oriented system;

    • —stating the member’s intention to reach understandings with the Fund as soon as possible on a comprehensive adjustment program that could be supported by a Fund arrangement; and

    • —describing a financial program, including quarterly targets for relevant macroeconomic indicators, for the next 12 months, if such a program can reasonably be elaborated; and

  • (ii) such prior actions, if any, as the Fund considers appropriate.

(b) A member shall be deemed to fulfill the condition of willingness to cooperate set out in subparagraph (a) above with respect to a request for a first purchase, if a Fund arrangement is approved or a program review under a Fund arrangement is completed for the member while the request for the first purchase is under consideration by the Fund.

4. (a) A member may expect that its request for a second purchase under this Decision, which would normally be made about 6 months, but in any event not later than 12 months, after the date of the first purchase, will be met when the Fund is satisfied that the member continues to cooperate with the Fund in an effort to find appropriate solutions to its balance of payments difficulties, based on:

  • (i) a finding by the Fund that there has been satisfactory progress (1) toward reaching understandings between the member and the Fund on a comprehensive adjustment program that could be supported by a Fund arrangement, taking into account the policies and measures carried out by the member since the first purchase, and (2) in mobilizing the external financing necessary to support the policies being implemented with the support of the Fund under this Decision;

  • (ii) a written statement submitted by the member describing or updating the financial program, including quarterly targets of relevant macro-economic indicators, for the subsequent two quarters; and

  • (iii) such prior actions, if any, as the Fund considers appropriate.

(b) A member shall be deemed to fulfill the condition of continuing cooperation set out in subparagraph (a) above with respect to a request for a second purchase, and may make such purchase earlier than specified in subparagraph (a) above, if a Fund arrangement is approved or a program review under a Fund arrangement is completed for the member not less than two months after the date of the first purchase and while the request for the second purchase is under consideration by the Fund.

5. A member that has a Fund arrangement shall, as a condition for making a purchase under this Decision, reach understandings with the Fund on appropriate modifications of the terms and conditions of the arrangement, including the amount of the arrangement.

6. Purchases under this Decision and holdings resulting from such purchases shall be excluded for the purposes of the definition of “reserve tranche purchase” pursuant to Article XXX(c).

7. Except for the purpose of determining the level of conditionality applied to purchases in the credit tranches, the Fund’s holdings of a member’s currency resulting from purchases under this Decision shall be considered separate from the Fund’s holdings of the same currency resulting from purchases made under any other policy on the use of the Fund’s general resources. In cases of concurrent requests for a purchase in the credit tranches and for a purchase under this Decision, the purchase under this Decision shall be deemed to be made first.

8. In order to carry out the purposes of this Decision, the Fund will be prepared to grant a waiver of the limitation of 200 percent of quota in Article V, Section 3(b)(iii), whenever necessary to permit purchases under this Decision or to permit other purchases that would raise the Fund’s holdings of the purchasing member’s currency above that limitation because of purchases outstanding under this Decision.

9. Wherever used in this Decision, the expression “Fund arrangement” will mean an upper credit tranche stand-by or extended arrangement or an arrangement under the enhanced structural adjustment facility.

10. In providing financing pursuant to this Decision, the Fund, as under any other policies of the Fund, shall pay due attention to the member’s capacity to service its financial obligations to the Fund, and, having regard to the outstanding financial obligations of the member to the Fund and to assurances received from creditors and donors, may reduce the amount of financing accordingly, notwithstanding any other provision of this Decision.

11. Notwithstanding paragraph 1, a second purchase under paragraph 4 may be made by a member after December 31, 1994, but not later than December 31, 1995, provided that the member has made the first purchase under paragraph 3 before December 31, 1994.

12. Pursuant to Article V, Section 7(d), repurchases in respect of an outstanding purchase under this Decision shall be made in equal semiannual installments during the period beginning four and one-half years and ending ten years after the purchase.

13. Rule I-6(4) shall be amended by inserting the following new subparagraph (viii):

or (viii) under the Systemic Transformation Facility (Executive Board Decision No. 10348-(93/61) STF, adopted April 23, 1993).

Decision No. 10348-(93/61) STF

April 23, 1993

O. Increases in Quotas of Members

(a) Period for Consent to Increases in Quotas Under Ninth General Review and Substitution of Ordinary for Borrowed Resources Under Enlarged Access Policy—Extension

1. The Executive Board, considering that:

  • —it is a matter of great regret that some member countries have not yet consented to the quota increase under the Ninth Review or accepted the Third Amendment;

  • —it appears that both the quota increase and the Third Amendment will not become effective before the end of September 1992;

  • —early ratification of the general increase in members’ quotas under the Ninth Review is imperative;

  • —the Fund’s liquidity position is projected to decline rapidly during 1992-93, which increases the urgency of the quota increase coming into effect as early as possible,

urges those members that have not yet consented to their quota increases under the Ninth Review or accepted the Third Amendment to make every effort to complete the necessary procedures as soon as possible.

2. The Executive Board decides that Decision No. 9546-(90/145)35 on the substitution of ordinary for borrowed resources in financing purchases made under arrangements approved under the Policy on Enlarged Access shall continue to 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 November 30, 1992, whichever is earlier.

3. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on November 30, 1992.

Decision No. 10147-(92/120)

September 28, 1992

(b) Effectiveness of Increases in Quotas of Members Under Ninth General Review

1. The Executive Board determines that members having 70 percent of the total of quotas on May 30, 1990 have consented to the increases in their quotas under the Ninth General Review and notes that the effective date of the Third Amendment will be November 11, 1992.

2. The Secretary is authorized and directed to dispatch to members, the Federated States of Micronesia, and Tajikistan a communication on November 11, 1992, the text of which is set out in [the] Attachment.

Decision No. 10189-(92/134)

November 11, 1992

Attachment

The International Monetary Fund has determined that members having 70 percent of the total of Fund quotas as of May 30, 1990 have consented to increases in their quotas under the Ninth General Review of Quotas and, as you have been notified, the Third Amendment entered into force for all members today, November 11, 1992. This is to advise you, therefore, that these requirements of the Ninth General Review of Quotas under Board of Governors Resolution No. 45-2 have been met. Your attention is drawn to the following points of timing and procedure.

First, members that have not as yet consented to their quota increases may still consent but their consent must be received in the Fund not later than 6:00 p.m., Washington time, on November 30, 1992. The Executive Board may extend this period for consent.

Second, each member that has already consented to the quota increase as of today must pay to the Fund this increase within 30 days after today, that is, by December 11, 1992. Members that consent later than today must pay the increase within 30 days after the date on which the Fund is notified of their consent. The Executive Board may also extend the payment period.

Third, the consent and payment periods outlined above are also applicable to members and prospective members for which no increases in quotas were proposed under Resolution No. 45-2 by virtue of the fact that they were not members on May 30, 1990. The membership resolutions adopted by the Fund for these countries enable them to consent to an increase in their quotas and provide that the consent and payment procedures for these increases will be the same as those for members under the Ninth General Review.

Fourth, a member with overdue repurchases, charges or assessments to the General Resources Account may not consent to or pay for the increase in its quota until it becomes current in respect of these obligations.

The Treasurer’s Department will continue to be in touch with the fiscal agencies of members regarding the payments for these quota increases.

Van Houtven

Secretary

Interfund

(c) Period for Consent to and Payment for Increases in Quotas Under Ninth General Review—Extension

1. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on May 31, 1993.

2. Pursuant to paragraph 5 of Resolution No. 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota within 75 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

Decision No. 10207-(92/142)

November 30, 1992

1. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on June 30, 1993.

2. Pursuant to paragraph 5 of Resolution 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth General Review within 231 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

Decision No. 10381-(93/77)

May 28, 1993

1. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on December 31, 1993.

2. Pursuant to paragraph 5 of Board of Governors Resolution No. 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth General Review within 415 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

Decision No. 10402-(93/90)

June 25, 1993

(d) Period for Payment for Increases in Quotas Under Ninth General Review—Extension

Pursuant to paragraph 5 of the Board of Governors Resolution No. 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth Review within 120 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

Decision No. 10272-(93/11)

January 22, 1993

Pursuant to paragraph 5 of the Board of Governors Resolution No. 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth Review within 201 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

Decision No. 10301-(93/31)

March 9, 1993

(e) Tenth General Review—Report to Board of Governors and Proposed Resolution

Article III, Section 2(a) of the Articles of Agreement provides that “the Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.” The five-year period for the Tenth Review will end on March 31, 1993. The Executive Board has established a Committee of the Whole in accordance with Rule D-3. The Committee has not yet been in a position to undertake a substantive review of the issues relating to the Tenth Review, including a review of the quota formulas, as called for in its report to the Board of Governors on the Ninth Review. As a consequence, the Executive Board is not in a position to make recommendations in time for the Board of Governors to adopt a resolution completing the Tenth General Review by March 31, 1993. Therefore, the Executive Board proposes that the Board of Governors decide to continue its review under Article III, Section 2(a), to request the Executive Board to complete its work on the matter and to submit a report to the Board of Governors, together with appropriate proposals, not later than December 31, 1994.

In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth in the attachment to this report.

Attachment

Draft Resolution

RESOLVED

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Tenth General Review, hereby resolves to continue its review under Article III, Section 2(a) and requests the Executive Board to complete its work on this matter and to submit a report, together with appropriate proposals, to the Board of Governors not later than December 31, 1994.

Board of Governors Resolution No. 48-3

April 14, 1993

P. Third Amendment off Articles of Agreement—Entry into Force

1. The proposed Third Amendment approved by Resolution No. 45-3 of the Board of Governors, adopted June 28, 1990, has been accepted by three fifths of the members having eighty-five percent of the total voting power and, in accordance with Resolution No. 45-3 of the Board of Governors, will enter into force as of the date of the formal communication certifying such acceptance.

2. The Secretary is authorized and directed by the Executive Board to send on behalf of the Fund on November 11, 1992 the formal communication, set out in Attachment A to [the staff paper], to all members, to the Federated States of Micronesia, and to Tajikistan, certifying that the required acceptances have been received and that, in accordance with Resolution No. 45-3 of the Board of Governors, the Third Amendment entered into force for all members on November 11, 1992, the date of the communication.

3. The Secretary is authorized and directed to send to the Secretary of State of the United States the communication set out in Attachment B to [the staff paper], notifying the Government of the United States of the entry into force of the Third Amendment and requesting the Government of the United States to register the Third Amendment with the Secretary-General of the United Nations.

Decision No. 10188-(92/134)

November 11, 1992

Q. Limitation, Ineligibility, and Suspension off Voting Rights

(a) Amendment of K-Rules

1. The heading of the K-Rules shall be amended to read as follows:

Limitation, Ineligibility, and Suspension of Voting Rights.

2. A new Rule K-6 shall be inserted as follows:

K-6. Before any member’s voting rights are suspended pursuant to Article XXVI, Section 2(b), the matter shall be considered by the Executive Board, which shall inform the member in reasonable time of the complaint against it and allow the member an adequate opportunity for stating its case both orally and in writing.

3. A new Rule K-7 shall be inserted as follows:

K-7. When a member, whose voting rights have been suspended, requests the Executive Board to terminate the suspension and the Executive Board decides not to terminate such suspension, a written report shall be presented to the member stating what further action is required before such suspension will be terminated.

Decision No. 10302-(93/32)

March 10, 1993

(b) Publicity Upon Suspension and Termination of Suspension

The Fund shall issue a press release upon its decision to suspend the voting rights of a member and thereafter upon termination of suspension, and shall also include the information contained in such press releases, where pertinent, in the Annual Report for the year concerned.

Decision Na 10305-(93/32)

March 10, 1993

(c) Amendment of By-Laws and Board of Governors Resolution No. 29-8—Report to Board of Governors and Proposed Resolution

For the implementation of the Third Amendment of the Articles of Agreement of the International Monetary Fund on the suspension of voting and related rights, which entered into force on November 11, 1992, the Executive Board of the Fund is hereby proposing that Sections 17 and 19 of the By-Laws and Board of Governors Resolution No. 29-8 be amended in accordance with the attached draft Resolution.

1. Amendment of Section 17 of the By-Laws

Pursuant to Schedule L, paragraph 3(c), in the case of suspension of a member’s voting rights, the “Executive Director appointed or elected by the member, or in whose election the member has participated, shall cease to hold office, unless such Executive Director was entitled to cast the number of votes allotted to other members whose voting rights have not been suspended. In the latter case: (i) if more than ninety days remain before the next regular election of Executive Directors, another Executive Director shall be elected for the remainder of the term by such other members…” Accordingly, it is proposed to amend Section 17 of the By-Laws in order to provide that, in the case of a by-election in accordance with Schedule L, a member whose voting rights have been suspended will not participate in the by-election.

2. Amendment of Section 19 of the By-Laws

Paragraph 4 of Schedule L provides that the “member [whose voting rights have been suspended] shall be entitled to send a representative to attend any meeting of the Board of Governors, the Council, or the Executive Board, but not any meeting of their committees, when a request made by, or a matter particularly affecting, the member is under consideration.” Section 19 of the By-Laws regulates the procedure for the representation of members not entitled to appoint an Executive Director at meetings of the Executive Board. It is proposed to extend this provision to the representation of members whose voting rights have been suspended at meetings of the Board of Governors and the Executive Board.

3. Amendment of Resolution No. 29-8

The guiding principle in Resolution No. 29-8 of the Board of Governors establishing the Interim Committee is that the constituencies in the Interim Committee reflect those in the Executive Board. Since the suspension of a member’s voting rights will affect the composition of the Executive Board, it is proposed that the Resolution be amended so that the composition of the Interim Committee continues to reflect the composition of the Executive Board. It is proposed to add a subparagraph (e) to paragraph 1 of the Resolution stating that a member whose voting rights have been suspended may no longer appoint, or participate in the appointment of, a member of the Committee and his associates, whether that member is a member that appoints, elects, or participates in the election of, an Executive Director. It is also proposed to amend the third sentence of paragraph 1(a) of Resolution No. 29-8 to make a specific reference to appointment by a single member “electing” an Executive Director; this would bring the Resolution in line with the practice of the Fund and the language used in Schedule L of the Articles.

Moreover, to maintain the parallel between constituencies in the Executive Board and the Committee, it is proposed to extend the provisions of Schedule L, paragraph 3(c) on the status of Executive Directors to members of the Committee and their associates. Accordingly, if a member of the Committee and his associates are appointed by a member whose voting rights have been suspended, this appointment shall be terminated. If a member of the Committee and his associates have been appointed by a group of members that includes members whose voting rights have not been suspended and among which a by-election has to be organized to fill a vacancy in the Executive Board, these other members shall make new appointments to the Interim Committee, pending which the previously appointed member of the Committee and his associates shall continue to serve for a maximum period from the date of suspension. That period would be the same as the period envisaged for an Executive Director in a similar situation, i.e., 30 days.

With respect to termination of suspension, no amendment of the Resolution is needed to maintain the parallel between constituencies in the Executive Board and the Interim Committee. A member that appoints an Executive Director would immediately regain its right to appoint a member of the Committee and his associates. In all other cases, the member would automatically or could by agreement join a group of members that elected an Executive Director, but, since there would be no new election of an Executive Director in this case, the restoration of the member’s voting rights would have no effect on the appointments made by the group of members to the Interim Committee. However, it would be open to the group to make new appointments to the Committee; in that case, the member whose voting rights had previously been suspended would participate in the appointment.

With respect to representation at meetings of the Interim Committee, paragraph 2 of Resolution No. 29-8 provides that a “member of the Fund not entitled to appoint a member of the Committee may send a representative to participate in any meeting of the Committee when a request made by, or a matter particularly affecting, that member is under consideration.” In the absence of an amendment, this provision will apply to a member whose voting rights have been suspended, and thereby provide an entitlement to send a representative to these meetings in the circumstances described in the Resolution. Since the Board of Governors may determine attendance at meetings of its committees, it may decide either to retain or to amend the existing provision. In view of the importance of the role of the Interim Committee in the institutional structure of the Fund and considering in particular that attendance at a meeting of the Interim Committee may be the last opportunity for a member whose voting rights have been suspended to present its views before a procedure for compulsory withdrawal is initiated, it is proposed not to amend paragraph 2 of the Resolution, thereby maintaining the existing entitlement.

Attachment

Draft Resolution

Amendment of the By-Laws of the, International Monetary Fund and Board of Governors Resolution No. 29-8

RESOLVED:

(a) That a new paragraph be added as a second paragraph in Section 17 of the By-Laws as follows:

If a member’s voting rights have been suspended, that member shall not participate in the election of the new Executive Director.

(b) That the title of Section 19 of the By-Laws be amended to read as follows:

Representation of Members at Meetings of Fund Organs

(c) That the following heading be inserted before paragraph (a) of Section 19:

1. Representation of Members Not Entitled to Appoint an Executive Director

(d) That the following provision be added at the end of Section 19, after paragraph (c):

2. Representation of Members Whose Voting Rights Have Been Suspended

The provisions of subsection 1 above shall apply, mutatis mutandis, to the representation of members whose voting rights have been suspended pursuant to Article XXVI, Section 2(b), at meetings of the Board of Governors and the Executive Board.

(e) That Resolution No. 29-8 on the Establishment of an Interim Committee of the Board of Governors on the International Monetary System, be amended as follows:

  • (i) the third sentence of paragraph 1(a) shall be amended as follows:

Each member of the Fund that appoints an Executive Director and each member or group of members of the Fund that elected an executive director on or after the date on which the last regular election took place shall appoint:…;

  • (ii) a new subparagraph (e) shall be added at the end of paragraph 1 as follows:

(e) A member of the Fund whose voting rights are suspended pursuant to Article XXVI, Section 2(b) shall not appoint, or participate in the appointment of, a member of the Committee and his associates. When the voting rights of a member are suspended, the rules in Schedule L, paragraph 3(c) on the termination of office and replacement of Executive Directors shall apply to the member of the Committee and associates appointed by the member or in whose appointment the member has participated.

Board of Governors Resolution No. 48-2

April 12, 1993

(d) Amendment of Board of Governors Resolution No. 29-9—Report to Board of Governors and Proposed Resolution

For the implementation of the Third Amendment of the Articles of Agreement of the International Monetary Fund on the suspension of voting and certain related rights, which entered into force on November 11, 1992, the Executive Board of the Fund is hereby proposing that Board of Governors Resolution No. 29-9 establishing the “Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries” (the “Development Committee”) be amended in accordance with the attached draft Resolution. Since the Development Committee was established by parallel Resolutions of the Fund’s and the Bank’s Boards of Governors, the same amendments are being proposed to the Board of Governors of the Bank.

The guiding principle in Resolution No. 29-9 of the Board of Governors is that the constituencies in the Development Committee—for the periods during which appointments are made by the members of the Fund—reflect those in the Executive Board of the Fund. Since the suspension of a member’s voting rights will affect the composition of the Executive Board, it is proposed that the Resolution be amended so that the composition of the Development Committee during these periods continues to reflect the composition of the Executive Board of the Fund.

It is proposed to add a subparagraph (g) to paragraph 1 of the Resolution stating that a member of the Fund whose voting rights have been suspended may no longer appoint, or participate in the appointment of, a member of the Committee, his alternate and his associates, whether that member is a member that appoints, elects, or participates in the election of, an Executive Director. It is also proposed to amend the first sentence of paragraph 1(d) of Resolution No. 29-9 to make a specific reference to appointment by a single member electing an Executive Director; this would bring the Resolution in line with the practice of the Fund and the language used in Schedule L of the Articles of Agreement of the Fund.

Moreover, to maintain the parallel between constituencies in the Executive Board of the Fund and the Committee, it is proposed to extend the provisions of Schedule L, paragraph 3(c) on the status of Executive Directors to members of the Committee, their alternates and associates. Accordingly, if a member of the Committee, his alternate and associates are appointed by the member of the Fund whose voting rights have been suspended, this appointment shall be terminated. If a member of the Committee, his alternate and associates have been appointed by a group of members of the Fund that includes members whose voting rights have not been suspended and among which a by-election has to be organized to fill a vacancy in the Executive Board, these other members shall make new appointments to the Development Committee, pending which the previously appointed member of the Committee, his alternate and associates shall continue to serve for a maximum period from the date of suspension. That period would be the same as the period envisaged for an Executive Director in a similar situation, i.e., 30 days.

With respect to termination of suspension, no amendment of the Resolution is needed to maintain the parallel between constituencies in the Executive Board of the Fund and the Development Committee. A member of the Fund that appoints an Executive Director would immediately regain its right to appoint a member of the Development Committee, his alternate and associates. In all other cases, the member would automatically or could by agreement join a group of members of the Fund that elected the Executive Director, but since there is no new election of an Executive Director in this case, the restoration of the member’s voting rights would have no effect on appointments already made by the group of members of the Fund to the Development Committee. However, it would be open to the group to make new appointments to the Committee; in that case, the member whose voting rights had previously been suspended would participate in the appointment.

It is proposed to leave it to the Committee to decide, on a case-by-case basis, whether a member of the Fund whose voting rights have been suspended should be invited to send a representative to participate in meetings of the Committee.

The Executive Directors of the Bank have also endorsed amendments to Resolution No. 294 of the Board of Governors of the Bank on the establishment of the Development Committee reflecting the amendments proposed above with respect to periods when appointments are made by the members of the Fund, and establishing the same principle for periods in which appointments are made by the members of the Bank—that the constituencies in the Committee should reflect the constituencies in the Board of Executive Directors in the event that a Bank member is suspended—taking into account the provision of the Bank’s Articles of Agreement on the suspension of members. The amendment of the Resolutions concerning periods in which appointments are made by the members of the Bank is set out in paragraph (b) of the attached draft Resolution.

Attachment

Draft Resolution

Amendment of Board of Governors Resolution No. 29-9

RESOLVED:

1. That Resolution No. 29-9 on the Establishment of Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries (the “Development Committee”), be amended by

(a) inserting the words “or elects” after the word “appoints” in the second line of paragraph (l)(d);

(b) adding the following new subparagraphs (f) and (g) at the end of paragraph 1 as follows:

(f) During the periods when appointments are made by members of the Bank, a member of the Bank whose membership has been suspended pursuant to Article VI, Section 2 of the Articles of Agreement of the Bank shall not appoint or participate in the appointment of a member of the Committee, his alternate and associates. When the membership of a member of the Bank is suspended, and when a suspended member is restored to good standing, the consequences on the Executive Director of the Bank appointed or elected by such member, or in whose election such member participated, shall apply to the member of the Committee, his alternate and associates appointed by that member of the Bank, or in whose appointment such member participated.

(g) During the periods when appointments are made by members of the Fund, a member of the Fund whose voting rights are suspended pursuant to Article XXVI, Section 2(b) of the Articles of Agreement of the Fund shall not appoint, or participate in the appointment of, a member of the Committee, his alternate and associates. When the voting rights of a member of the Fund are suspended, the rules in Schedule L, paragraph 3(c) of the Articles of Agreement of the Fund on the termination of office and replacement of Executive Directors shall apply to the member of the Committee, his alternate and associates appointed by that member of the Fund, or in whose appointment such member participated.

2. The amendments of Resolution No. 29-9 set out in paragraph 1 above shall come into force on the date this Resolution is adopted or the date amendments in identical terms of Resolution No. 294 of the Board of Governors of the Bank are adopted, whichever is later.

Board of Governors Resolution No. 48-4

April 23, 1993

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