Selected Decisions Annex (14th Ed)
Chapter

Policy on Enlarged Access: Borrowing Agreements with the Bank for International Settlements (BIS), Japan, and the National Bank of Belgium—Extension of Commitment Periods*

Author(s):
International Monetary Fund
Published Date:
April 1989
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The Executive Board authorizes the Managing Director

(i) to accept the proposal by the BIS that the commitment period under the 1984 borrowing agreement with the BIS be extended to December 31, 1985, and that a further stand-by commission be paid corresponding to the extended commitment period, as set out in Attachment I [below]; and

(ii) to propose extensions of the commitment periods under the 1984 borrowing agreements with Japan (to December 31, 1985) and the National Bank of Belgium (to February 28, 1986), as set out in Attachment II [below].

Decision No. 7955-(85/60) April 23, 1985

Attachment I

Proposal from the BIS Received in the Fund on April 15, 1985

Reference the Agreement between the BIS and the Fund, constituted by an exchange of telexes on 13th April 1984 and 30th April 1984, establishing a stand-by facility in favor of the Fund for an amount equivalent to SDR 2,505 million. Following your request for an extension of the arrangement I propose on behalf of the BIS that the agreement be amended as follows:

1. The period during which the Fund may draw on the facility, as specified in clause 3 of the Agreement, shall be extended by a further period of eight months, ending on 31st December 1985.

2. In consequence of this extension, the Fund shall, on 30th April 1985, pay to the BIS the further stand-by commission referred to in paragraph 3 below.

3. Clause 2 of the facility shall be amended to read as follows:

“2. A stand-by commission of one quarter of one percent shall be payable to the BIS, at the commencement of the draw-down period referred to in clause 3, with respect to the full amount of the facility. A further stand-by commission of one quarter of one percent per annum shall be payable to the BIS on 30th April 1985 with respect to the amount remaining available for drawing under the facility on that date, and the extended draw-down period (30th April to 31st December 1985). The stand-by commission paid at the commencement of the draw-down period shall be refunded pro rata temporis, at the rate of one quarter of one percent per annum, in respect of amounts drawn and outstanding during the first twelve months of the drawdown period. The further stand-by commission shall be refunded pro rata temporis, at the rate of one quarter of one percent per annum, in respect of amounts drawn and outstanding during the final eight months of the draw-down period. Amounts to be so refunded will be applied in reducing amounts of interest due on relevant drawings, calculated in accordance with clause 10 below.”

In all other respects the provisions of the Agreement shall continue in effect, and shall apply to all amounts drawn during the extended period. Please confirm by tested telex your acceptance of this proposal. This telex and your confirmation shall constitute an amendment to the agreement, ‘which will become effective on the date of your acceptance.

Attachment II

Proposed Communication from the Fund Amending Agreement with Government of Japan

I refer to the Agreement between the Government of Japan and the Fund, which became effective on April 30, 1984, establishing a stand-by facility in favor of the Fund for an amount equivalent to SDR 375 million. On behalf of the Fund, I propose that paragraph 2 of the Agreement be amended by extending the period during which the Fund may draw on the facility for a further period to end on December 31, 1985. If you concur, please send a duly authenticated reply indicating that this extension is acceptable to Japan. The amendment shall become effective on the date the Fund acknowledges receipt of your reply.

Proposed Communication from the Fund Amending Agreement with National Bank of Belgium

I refer to the Agreement between the National Bank of Belgium and the Fund, which became effective on April 30, 1984, establishing a stand-by facility in favor of the Fund for an amount equivalent to SDR 120 million. On behalf of the Fund, I propose that paragraph 2 of the Agreement be amended by extending the period during which the Fund may draw on the facility for a further period of eight months, to end on February 28, 1986. If you concur, please send a duly authenticated reply indicating that this extension is acceptable to the Bank. The amendment shall become effective on the date the Fund acknowledges receipt of your reply.

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