Selected Decisions (8th Ed)
Chapter

Article XXV, Section 6(a): Principles and Procedures for Reconstitution

Author(s):
International Monetary Fund
Published Date:
May 1976
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1. For the purposes of Rule P-2 and without prejudice to any future decisions on allocations or cancellations of special drawing rights, it shall be assumed that an allocation of special drawing rights will be made on January 1, 1972, in accordance with Board of Governors Resolution No. 24-12, and that no allocations or cancellations will be made thereafter. This assumption shall be subject to review at any time and shall be reviewed not later than December 31, 1972.

2. Pursuant to Article XXV, Section 2(b) (ii), the Fund prescribes that a participant may obtain special drawing rights from another participant in a transaction with that other participant that would promote reconstitution under Article XXV, Section 6(a) and Schedule G, paragraph I (a). The maximum amount that may be obtained in that way shall be the single amount most recently notified to the participant under Rule P-3 unless that single amount has been calculated for acquisition in the final month of a reconstitution period, in which case the participant may acquire the amount calculated by the Fund as necessary to promote reconstitution, taking into account the proposed date of acquisition. These maximum amounts will be reduced by any acquisition of SDRs other than by way of allocation subsequent to the date the calculation is made.

3. Pursuant to Article XXV, Section 7(f), a participant that makes a purchase from the Fund under Article V, Section 3, may obtain special drawing rights from the Fund through the General Account in that purchase to the extent of any need it has to acquire special drawing rights in order to promote reconstitution under Article XXV, Section 6(a) and Schedule G, paragraph 1(a).

Decision No. 3437-(71 /121) G/S,

December 3, 1971, as amended

by Decisions Nos. 3829-(72/144) S,

December 15, 1972, and 4330-(74/101) S, August 9,1974

Calculations under Schedule G-1(a)(ii) shall continue to be based on the assumption set forth in paragraph 1 of Executive Board Decision No. 3457-(71/121) G/S, adopted December 3, 1971, that no further allocations or cancellations of special drawing rights will be made, but this assumption shall be reviewed immediately after the date on which the Managing Director makes a proposal under Article XXIV, Section 4.

This decision shall be reviewed not later than June 30, 1974.

Decision No. 3829-(72/144) S

December 15, 1972

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