Selected Decisions Annex (14th Ed)
Chapter

Enhanced Structural Adjustment Facility—Borrowing Agreement

Author(s):
International Monetary Fund
Published Date:
April 1989
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Monetary Authority of Singapore

Pursuant of Section IV, paragraph 3 of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust, the International Monetary Fund, in its capacity as Trustee of that Trust, approves the agreement for borrowing from the Monetary Authority of Singapore in terms of the draft agreement set out in the attachment to EBS/88/225, and authorizes the Managing Director to take such action as is necessary to conclude and implement the agreement.

Decision No. 9016-(88/164) ESAF November 4, 1988

Attachment to EBS/88/225

Enhanced Structural Adjustment Facility: Proposed Borrowing Agreement with the Monetary Authority of Singapore

I have been authorized to propose on behalf of the International Monetary Fund (the “Fund”) as Trustee (the “Trustee”) of the Enhanced Structural Adjustment Facility Trust (the “Trust”) that the Monetary Authority of Singapore (the “MAS”) agree to lend to the Fund as Trustee for the purpose of providing resources to the Subsidy Account of that Trust, in accordance with Section IV, paragraph 3(b) of the Instrument establishing the Trust (the “Instrument”) adopted by the Executive Board of the Fund by Decision No. 8759-(87/176) ESAF, December 18, 1987. The amount of the loan is to be the equivalent of SDR 40 million and the terms and conditions of this loan shall be as follows:

1. (a) The Trustee may make four drawings in annual installments of the equivalent of SDR 10 million each under this agreement. The date of each drawing shall be agreed between the Trustee and the MAS, but in any case the first drawing shall not be made later than November 30, 1988, and, subject to paragraph 9, the three subsequent drawings shall not be made later than September 1 in each of 1989, 1990, and 1991. The proceeds of each drawing shall be invested by the Trustee.

(b) If any installment of interest is not paid to the MAS within a period of ten days after its due date, the Trustee shall not make further drawings under this agreement pending consultations with the MAS on the matter. However, the Trustee may resume drawings under this agreement once any arrears to Singapore have been discharged.

2. (a) The amount of each drawing shall be denominated in SDRs. Unless otherwise agreed between the Trustee and the MAS, the amounts shall be paid by the MAS on the value dates to be agreed, by transfer of the equivalent amount of SDRs to an account specified by the Trustee.

(b) Upon request, the Trustee shall issue to the MAS non-negotiable certificate evidencing its claim on the Trust resulting from a drawing outstanding under this Agreement.

3. Each drawing shall have a maturity of ten years. If the maturity period does not end on a business day in the place where payment is to be made, the maturity date shall be the next succeeding business day in that place.

4. (a) Each drawing shall bear interest at an annual rate of 2 percent per annum.

(b) The amount of interest payable shall be calculated on the basis of the actual number of days that interest has accrued and a 365-day year and shall be paid annually or on the date the principal amount is repaid, whichever is earlier, from the proceeds of the investment.

5. The Trustee shall repay the principal amount of each drawing on the final maturity date applicable to the drawing or on such earlier repayment date as may be established pursuant to paragraph 9 or 10 of this agreement, from the proceeds of the investment.

6. Payments by the Trustee of principal and interest shall be made in SDRs or in other media as agreed between the Trustee and the MAS. Payments in SDRs shall be made by crediting the amount due to Singapore’s holdings account in the Special Drawings Rights Department. Payments in other media shall be made to accounts specified by the MAS.

7. Unless otherwise agreed between the MAS and the Trustee, all transfers and payments of principal and interest shall be made at the exchange rates for the relevant currencies in terms of the SDR established by the Fund for the third business day of the Fund before the value date of the transfer or payment.

8. If the Fund changes the method of valuing the SDR, all transfers, exchanges, and payment of principal and interest made three or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation.

9. The MAS intends to maintain each drawing outstanding through its final maturity date. However, if the MAS represents that because of Singapore’s balance of payments and reserve position there is a need for the MAS to suspend any drawing and/or to encash all or part of its claims on the Trust, and the Trustee, having given such representation(s) the overwhelming benefit of any doubt, agrees, such drawing shall be suspended and/or the claims shall be encashed in whole or in part in advance of the final maturity date. MAS agrees to provide the drawing and/or to restore the drawing as soon as practicable in light of developments in Singapore’s balance of payments and reserve position.

10. The Trustee may repay the principal amount of the drawing in part or in full at any time in advance of the final maturity date.

11. Any question arising hereunder shall be settled by mutual agreement between the MAS and the Trustee.

12. If the foregoing proposal is acceptable to the MAS, this communication and your duly authenticated reply accepting the proposal shall constitute an agreement between the MAS and the Trustee, which shall enter into effect on the date the Trustee acknowledges receipt of your reply.*

Enhanced Structural Adjustment Facility—Establishment of Administered Account

Bank of Greece

1. Pursuant to Article V, Section 2(b), at the request of the Bank of Greece (the “Bank”) as set forth in its letter dated November 18, 1988 (Annex II), the Fund adopts the Instrument to establish an account for the administration by the Fund of the deposit to be provided by the Bank on the terms and conditions set forth in the Instrument that is annexed to this decision (Annex I).

2. The provisions of the Instrument may be amended only by a decision of the Fund and with the concurrence of the Bank.

3. Pursuant to Article V, Section 2(b), the Managing Director is authorized to accept the proposal by the Bank (Annex III) to make a deposit with the Administered Account in the equivalent of SDR 35 million. The deposit shall be administered in accordance with the provisions of the Instrument adopted under paragraph 1 of this decision. The agreement between the Fund and the Bank on the deposit shall enter into effect on the date to Fund accepts the proposal by the Bank for a deposit with an Administered Account.*

Decision No. 9030-(88/173) ESAF

November 30, 1988

Annex I

Proposed Instrument for an Administered Account Greece

To help fulfill its purposes, the International Monetary Fund (hereinafter called the Fund) has adopted this Instrument to establish an account in accordance with Article V, Section 2(b) (“Administered Account Greece”) at the request of the Bank of Greece, which shall be governed by, and administered in accordance with, the terms and conditions of this Instrument:

1. The Managing Director is hereby authorized to establish with the Fund an account for the administration of resources deposited in that account by the Bank of Greece (the “Bank”).

2. The amount of the deposit shall be denominated in SDRs. The amount shall be paid by the Bank by transfer of an equivalent amount of U.S. dollars to an account designated by the Fund.

3. The resources of the account shall be invested by the Fund. The Managing Director is authorized (i) to make all arrangements, including establishment of accounts in the name of the International Monetary Fund, with such depositories of the Fund as may be necessary to carry out the operations of the account, and (ii) to take all measures necessary to implement the provisions of this Instrument.

  • 4. (a) The deposit shall bear interest at an annual rate of one half of one percent per annum (0.5%).

    • (b) The amount of interest payable in respect of the amount of the deposit outstanding shall be calculated on the basis of the actual number of days that intererst has accrued and a 365-day year and shall be paid by the Fund on each anniversary of the deposit or on the date the relevant principal amount is repaid, whichever is earlier, from the proceeds of the investment.

5. The differences between the interest earned by the Fund on the invested amount and the interest due to the Bank under paragraph 4, net of any cost, shall be transferred promptly to the Subsidy Account of the Enhanced Structural Adjustment Facility Trust.

  • 6. (a) The Fund shall repay the principal amount of the deposit in ten equal semiannual installments, which shall begin not later than the end of the first six months of the sixth year, and be completed at the end of the tenth year, after the date of the deposit.

    • (b) The Fund shall repay the principal amount of the deposit from the proceeds of the investment.

7. Payments by the Fund of principal and interest shall be made in U.S. dollars and shall be made by crediting the amount due to an account designated by the Bank. If a payment date does not fall on a business day in New York, payment shall be made on the next succeeding business day in New York.

8. Unless otherwise agreed between the Bank and the Fund, the transfer under paragraph 2, and all payments of principal and interest, shall be made at the exchange rates for U.S. dollars, in terms of the SDR, established by the Fund for the third business day of the Fund before the value date of the transfer or payment.

9. The Bank intends to maintain the deposit outstanding through its maturity, subject to paragraphs 6(a) and 10. However, if the Bank represents that because of Greece’s balance of payments and reserve position there is a need to encash all or part of the outstanding deposit, and the Fund, having given this representation the overwhelming benefit of any doubt, agrees, the deposit may be encashed in whole or in part in advance of maturity. The Bank agrees to restore the deposit as soon as practicable in light of developments in Greece’s balance of payments and reserve position.

10. The Fund may repay the principal amount of the deposit in part or in full at any time in advance of maturity.

  • 11. (a) The assets and property of the account shall be kept separate from the assets and property of all other accounts of, or administered by, the Fund. The assets and property held in such other accounts shall not be used to discharge or meet the liabilities, obligations, or losses of the Fund incurred in the administration of the account; nor shall the assets and property of the account be used to discharge or meet the liabilities, obligations, or losses incurred by the Fund in the administration of such other accounts.

    • (b) Subject to the provisions of this Instrument, the Fund, in administering the account, shall apply mutatis mutandis the same rules and procedures as apply to operations of the General Resources Account of the Fund.

    • (c) No charge shall be levied on the Bank for the services rendered by the Fund in the administration, operation, and termination of this account.

  • 12. (a) The Fund shall maintain separate financial records and prepare separate financial statements for the account.

    • (b) The Audit Committee selected under Section 20 of the Fund’s By-Laws shall audit the operations and transactions conducted through the account. The audit shall relate to the financial year of the Fund.

    • (c) The Fund shall report on the assets and property and on the operations of the account in the Annual Report of the Executive Board to the Board of Governors and shall include in that Annual Report the report of the Audit Committee on the account.

13. The account shall be terminated upon completion of its operation. Once the obligation to repay the deposit has been discharged and the final payment of interest has been made, any surplus remaining in the account shall be transferred to the Subsidy Account of the Enhanced Structural Adjustment Facility Trust.

14. Any question arising hereunder shall be settled by mutual agreement between the Bank and the Fund.

Annex II

Athens, 18 November 1988

Dear Mr. Camdessus,

The Bank of Greece proposes to deposit in an account to be established with the International Monetary Fund for the administration of the deposited resources in accordance with Article V, Section 2(b) of the Fund’s Articles of Agreement an amount equivalent to SDR 35 million on a value date to be agreed between the Bank of Greece and the Fund, but in any case not later than December 15, 1988. It is also proposed that the deposit and its administration be governed by the provisions of the attached Instrument,* which is subject to the approval of the Executive Board of the Fund.

If the foregoing proposal is acceptable to the Fund, this communication and your duly authenticated reply accepting this proposal shall constitute an agreement between the Fund and the Bank of Greece. It shall enter into effect on the date the Fund accepts the proposal.

The Bank of Greece requests the Fund to open an account for the administration of the deposit in accordance with Article V, Section 2(b) of the Fund’s Articles of Agreement.

Sincerely,

/s/ Demetrios Chalikias

Governor

Bank of Greece

Mr. Michel Camdessus

Managing Director

International Monetary Fund

700 19th Street, N.W.

Washington, D.C. 20431

U.S.A.

Annex III

November 30, 1988

Dear Mr. Chalikias:

I am delighted to acknowledge and thank you for your letter of November 18, 1988 proposing a deposit by the Bank of Greece for the benefit of the Subsidy Account of the Enhanced Structural Adjustment Facility Trust. I have been authorized to accept your proposal for the Bank’s deposit, and I am pleased to inform you that the Executive Board has adopted the Instrument to establish an account for the administration of the deposit by the Fund, as set out in the attachment to your letter.

Please let me express my deep appreciation, and that of the Fund’s membership, for the generous support the Bank of Greece is providing for the Enhanced Structural Adjustment Facility initiative.

Sincerely,

Michel Camdessus

Mr. Demetrios Chalikias

Governor

Bank of Greece

P.O. B. 105

21 E1. Venizelou Street

Athens, Greece

Enhanced Structural Adjustment Facility—Borrowing Agreement

Bank of Korea

Pursuant to Section III, paragraph 2 of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust, the International Monetary Fund, in its capacity as Trustee of that Trust, approves the agreement for borrowing from the Bank of Korea in terms of the draft set out in the attachment to EBS/89/36, and authorizes the Managing Director to take such action as is necessary to conclude and implement the agreement.

Decision No. 9120-(89/40) ESAF

March 29, 1989

Attachment to EBS/89/36

Enhanced Structural Adjustment Facility: Proposed Borrowing Agreement with the Bank of Korea

I have been authorized to propose on behalf of the International Monetary Fund (the “Fund”) as Trustee (the “Trustee”) of the Enhanced Structural Adjustment Facility Trust (the “Trust”) that the Bank of Korea (the “Bank”) agree to lend to the Fund as Trustee for the purpose of providing resources to the Loan Account of that Trust, in accordance with the terms of the Instrument establishing. the Trust (the “Instrument”) adopted by the Executive Board of the Fund by Decision No. 8759-(87/176) ESAF, adopted December 18, 1987. The amount of the loan is to be the equivalent of SDR 65 million and the terms and conditions of this loan shall be, as follows:

1. a. The Trustee may make drawings under this agreement at any time during the period from the effective date of this agreement through June 30, 1993, upon giving the Bank at least five business days (Washington, D.C.) notice by tested telex, provided that total drawings may not exceed SDR 44 million until January 1, 1990.

b. If any installment of interest is not paid to the Bank within a period of ten days after its due date, the Trustee shall not make further drawings under this agreement pending consultations with the Bank on this matter. However, the Trustee may resume drawings under this agreement once arrears to the Bank have been discharged.

2. a. The amount of each drawing shall be denominated in SDRs. Unless otherwise agreed between the Trustee and the Bank, the amount shall be paid by the Bank, on the value date specified in the Trustee’s notice, by transfer of the equivalent amount of U.S. dollars to the account of the Trust at the Federal Reserve Bank of New York, New York.

b. Upon request, the Trustee shall issue to the Bank a non-negotiable certificate evidencing its claim on the Trust resulting from a drawing outstanding under this agreement.

3. a. Each drawing shall be repaid in ten equal semiannual installments beginning five and one-half years and ending ten years after the date of the drawing. Repayments by the Trust shall be made on or promptly after the relevant maturity date.

b. By agreement between the Bank and the Trustee, any drawing or part thereof may be repaid by the Trustee at any time in advance of maturity.

c. If a drawing matures on a date that is not a business day of the Fund, the maturity date shall be on the preceding business day.

4. a. The rate of interest applicable to each drawing shall be calculated at the time of the drawing and at intervals of six calendar months thereafter. The amount outstanding in respect of each drawing shall bear interest at an annual rate determined by the Trustee at the time of the calculation from the product of:

(i) The interest rate on domestic instruments in each currency included in the SDR basket, as reported to the Trustee by each reporting agency, on the business day of the Fund referred to in paragraph 8, as follows:

  • —the bond equivalent yield for six-month U.S. Treasury bills,

  • —the six-month interbank rate in Germany,

  • —the six-month rate for interbank loans against private paper in France,

  • —the average rate for newly issued bank CDs in Japan with a maturity of between 150 days and 180 days,

  • —the six-month interbank rate in the United Kingdom, and

(ii) the percentage weight of that currency in the valuation of the SDR on that business day, calculated by using the same amounts and exchange rates for currencies as are employed by the Fund for calculating the value of the SDR in terms of the U.S. dollar on that day.

The applicable interest rate shall be the sum of the products so calculated, rounded to two decimal places.

b. The amount of interest payable in respect of each drawing shall be calculated on an actual day basis and shall be paid on all outstanding drawings under this agreement promptly after June 30 and December 31 of each year.

5. a. Payments of principal and interest shall be made in U.S. dollars, or in other media as may be agreed between the Trustee and the Bank.

b. Payments in U.S. dollars shall be made by crediting the amount due to the account of the Bank at the Federal Reserve Bank of New York, New York. Payments in SDRs shall be made by crediting Korea’s holdings account in the Special Drawing Rights Department. Payments in other currencies shall be made to an account specified by the Bank.

6. a. The Bank shall have the right to transfer at any time all or part of any claim to any member of the Fund, to the central bank or other fiscal agency designated by any member for purposes of Article V, Section 1, or to any official entity that has been prescribed as a holder of SDRs pursuant to Article XVII, Section 3 of the Fund’s Articles of Agreement.

b. The transferee shall acquire all the rights of the Bank under this agreement with respect to repayment of and interest on the transferred claim.

7. At the request of the Bank, calls on its commitment to meet drawings may be suspended temporarily at any time prior to December 31, 1992, subject to the provisions of Section III, paragraph 4(b) and (c) of the Instrument.

8. Unless otherwise agreed between the Trustee and the Bank, all transfers, exchanges, and payments of principal and interest shall be made at the exchange rates for the relevant currencies in terms of the SDR established by the Fund for the third business day of the Fund before the value date of the transfer, exchange, or payment.

9. If the Fund changes the method of valuing the SDR, all transfers, exchanges, and payments of principal and interest made three or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation.

10. Any question arising hereunder shall be settled by mutual agreement between the Bank and the Trustee.

If the foregoing proposal is acceptable to the Bank, this communication and your duly authenticated reply accepting this proposal shall constitute an agreement between the Bank and the Trustee, which shall enter into effect on the date the Trustee acknowledges receipt of your reply.*

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