Articles of Agreement of the International Monetary Fund. Adopted at the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 22, 1944. Entered into force December 27, 1945. Amended effective July 28, 1969...; amended effective April 1, 1978...; and amended effective November 11, 1992...
Chapter

Article XXX Explanation of Terms

Author(s):
International Monetary Fund
Published Date:
September 1993
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In interpreting the provisions of this Agreement the Fund and its members shall be guided by the following provisions:

(a) The Fund’s holdings of a member’s currency in the General Resources Account shall include any securities accepted by the Fund under Article III, Section 4.

(b) Stand-by arrangement means a decision of the Fund by which a member is assured that it will be able to make purchases from the General Resources Account in accordance with the terms of the decision during a specified period and up to a specified amount.

(c) Reserve tranche purchase means a purchase by a member of special drawing rights or the currency of another member in exchange for its own currency which does not cause the Fund’s holdings of the member’s currency in the General Resources Account to exceed its quota, provided that for the purposes of this definition the Fund may exclude purchases and holdings under:

  • (i) policies on the use of its general resources for compensatory financing of export fluctuations;

  • (ii) policies on the use of its general resources in connection with the financing of contributions to international buffer stocks of primary products; and

  • (iii) other policies on the use of its general resources in respect of which the Fund decides, by an eighty-five percent majority of the total voting power, that an exclusion shall be made.

(d) Payments for current transactions means payments which are not for the purpose of transferring capital, and includes, without limitation:

  • (1) all payments due in connection with foreign trade, other current business, including services, and normal short-term banking and credit facilities;

  • (2) payments due as interest on loans and as net income from other investments;

  • (3) payments of moderate amount for amortization of loans or for depreciation of direct investments; and

  • (4) moderate remittances for family living expenses.

The Fund may, after consultation with the members concerned, determine whether certain specific transactions are to be considered current transactions or capital transactions.

(e) Net cumulative allocation of special drawing rights means the total amount of special drawing rights allocated to a participant less its share of special drawing rights that have been cancelled under Article XVIII, Section 2(a).

(f) A freely usable currency means a member’s currency that the Fund determines (i) is, in fact, widely used to make payments for international transactions, and (ii) is widely traded in the principal exchange markets.

(g) Members that were members on August 31, 1975 shall be deemed to include a member that accepted membership after that date pursuant to a resolution of the Board of Governors adopted before that date.

(h) Transactions of the Fund means exchanges of monetary assets by the Fund for other monetary assets. Operations of the Fund means other uses or receipts of monetary assets by the Fund.

(i) Transactions in special drawing rights means exchanges of special drawing rights for other monetary assets. Operations in special drawing rights means other uses of special drawing rights.

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