The Annual Report 2000 to the Board of Governors reviews the IMF's activities, policies, and financial position during the financial year (May 1, 1999 through April 30, 2000), as well as developments in the world economy. The Annual Report 2000 highlights the efforts of the IMF, together with other international institutions and groups, to strengthen the international financial and monetary system, so that future financial crises can be avoided, or better managed. The Report discusses the progress made with transparency and openness on the part of the IMF and its members, with implementing and monitoring the observance bh members of standards and codes of good practice, with helping strengthen members financial systems, with involving the private sector in financial crisis prevention and resolution, and in reforming its lending facilities and policies. The Annual Report also highlights the IMF's greater attention to poverty reduction, giving it a central role in its support for the reform efforts of the poorest countries - ingreater collaboration with the World Bank. Appendixes include an analysis of international reserves changes in fiscal 2000, IMF financial operations and transactions, key policy decisions, IMF relations with othe international organizations, external relations activities, press communiques of key advisory committees, the Executive Board and voting power as of April 30,2000, and changes in membership on the Executive Board. Published in September.



APPENDIX I International Reserves

Total international reserves increased by 9 percent during 1999 and stood at SDR 1.6 trillion at the end of the year (Table I.1). This reflected an 11 percent increase in foreign exchange holdings, which constitute the largest component of international reserves (SDR 1.29 trillion). In contrast, IMF related assets declined by 10 percent, to SDR 73 billion, resulting in a smaller overall increase of 9 percent in nongold reserves. The market value of gold reserves held by monetary authorities increased by 3 percent, to SDR 204 billion, at the end of 1999.1

Foreign Exchange Reserves

Foreign exchange reserves constituted 95 percent of nongold reserve assets at the end of 1999. Developing countries’ foreign exchange reserves rose by 12 percent to SDR 766 billion, while foreign exchange reserves of industrial countries rose by 9 percent to SDR 520 billion. At the beginning of 1999, euro-area countries’ foreign exchange reserves were affected by the introduction of the euro as reserves denominated in euro legacy currencies2 were converted into euros and thus ceased to be foreign claims.

Developing countries have steadily increased their share of foreign exchange holdings; at the end of 1999, they held 60 percent of total foreign exchange reserves. Foreign exchange reserves of oil-exporting developing countries increased by 13 percent during 1999. Net creditor developing countries’ foreign exchange reserves increased by 15 percent to SDR 161 billion, and those of net debtor countries rose by 11 percent to SDR 605 billion at the end of the year. Foreign exchange reserves of net debtor countries that have debt-servicing problems remained unchanged from the previous year, at SDR 121 billion, while those of countries without debt-servicing problems increased by 14 percent, to SDR 484 billion, at the end of 1999.

Holdings of IMF-Related Assets

During 1999, total IMF-related assets—which comprise reserve positions in the IMF and SDR holdings of all IMF members—fell by 10 percent, to SDR 73 billion at the end of the year, following annual increases of about 20 percent in the previous two years. The share of IMF-related assets in non-gold reserves has remained between 5 percent and 7 percent throughout the 1990s. At the end of 1999, members’ reserve positions in the IMF, which comprise their reserve tranche and creditor positions, stood at SDR 55 billion, and their SDR holdings stood at SDR 19 billion. The decline of 10 percent in IMF members’ holdings of SDRs reflects a shift of SDR 2 billion in SDR holdings to the IMF from its members. Industrial countries hold a majority of IMF-related assets: 84 percent at the end of 1999.

Gold Reserves

The market value of gold reserves was SDR 204 billion at the end of 1999 (a 3 percent increase over 1998). The physical stock of gold reserves held by monetary authorities declined marginally during 1999, but this was more than offset by an increase in the price of gold.3 The share of gold reserves has declined gradually from about 50 percent of total reserves in 1980 to 13 percent in 1999. In 1999, gold represented 23 percent of the total reserves of industrial countries, and only 4 percent of those of developing countries.

Developments in the First Quarter of 2000

During the first quarter of 2000, total reserve assets increased by SDR 36 billion, led by an increase in the foreign exchange reserves. IMF-related assets and the stock of gold reserves remained effectively unchanged. Because of a decline in the price of gold, however, the market value of gold reserves held by monetary authorities fell by SDR 7 billion.

Currency Composition of Foreign Exchange Reserves

The currency composition of foreign exchange reserves has changed gradually but fairly steadily over the past decade, with holdings of U.S. dollars, the dominant international reserve currency, rising to 66 percent of foreign exchange reserves at the end of 1999 from 51 percent at the beginning of the decade (Table 1.2). In 1999, the euro was the second most important reserve currency, accounting for a 13 percent share. The share of the euro at the end of 1999 was 2 percentage points lower than the end-1998 combined share of the four euro legacy currencies identified in Table 1.2: deutsche mark, French franc, Netherlands guilder, and private ecu. However, on January 1, 1999, the Eurosystem’s reserves previously denominated in euro legacy currencies became domestic assets of the euro area; hence, the 1998 data need to be adjusted before attempting to evaluate the development of the share of the euro since its introduction. On the basis of adjusted data (not shown in the tables), the combined share of these euro legacy currencies held outside the 11 euro-area countries in 1998 was practically identical to the share of the euro at the end of 1999.

Table I.1

Official Holdings of Reserve Assets1

(In billions of SDRs)

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Note: Components may not sum to totals because of rounding.Source: International Monetary Fund, International Financial Statistics.

End-of-year figures for all years except 2000. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain other countries or areas.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Table I.2

Share of National Currencies in Total Identified Official Holdings of Foreign Exchange, End of Year1

(In percent)

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Note: Components may not sum to total because of rounding.

Note that ecus are treated as a separate currency. Only IMF member countries that report their official holdings of foreign exchange are included in this table; accordingly, the entries in this table cannot be calculated solely from the entries in Table I.3.

Not comparable with the combined share of euro legacy currencies in previous years, part of which reflected holdings of the Eurosystem that became domestic assets, and thus were no longer recorded as foreign currency holdings, upon conversion into euros on January 1, 1999 (e.g., Germany’s holdings of French francs became holdings of domestic assets after their conversion into euros).

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

Overall, the shares of continental European currencies and the Japanese yen in total reserve holdings declined during the 1990s, while the share of pound sterling gradually increased from 3 percent to 4 percent. The Japanese yen and Swiss franc had shares at the end of 1999 that were virtually unchanged from the previous year, at 5 percent and 1 percent, respectively. The share of unspecified currencies increased from 7 percent in 1990 to 12 percent in 1999; this category includes currencies not identified in Table I.2, as well as foreign exchange reserves for which no information on currency composition is available.

In the calculation of currency shares, the ecu is treated as a separate currency. Ecu reserves held by the monetary authorities existed in the form of claims on both the private sector and the European Monetary Institute (EMI), which issued official ecus to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and U.S. dollar reserves. On December 31, 1998, the official ecus were unwound into gold and U.S. dollars; hence, the share of ecus at the end of 1998 was sharply lower than a year earlier. The remaining ecu holdings reported for 1998 consisted of ecus issued by the private sector, usually in the form of ecu deposits and bonds.

Table I.3

Currency Composition of Official Holdings of Foreign Exchange, End of Year1

(In millions of SDRs)

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Note: Components may not sum to totals because of rounding.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

Each item represents the sum of the currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

On January 1, 1999, these holdings were automatically converted into euros.

For industrial countries, the share of the U.S. dollar in foreign exchange reserves continued to increase, by 2 percentage points in 1999, to 68 percent of the total, a level not observed since the 1970s. The euro, which replaced 11 European national currencies and the ecu in January 1999, accounted for 11 percent of the foreign exchange reserves of industrial countries. The Japanese yen’s share in industrial countries’ currency holdings remained at about 6 percent, and that of the pound sterling was about 2 percent. In 1999, about 12 percent of the industrial countries’ foreign exchange holdings were in unspecified currencies.

The U.S. dollar’s share in developing countries’ foreign exchange holdings has remained in the range of 61 percent to 65 percent throughout the 1990s. Fourteen percent of developing countries’ foreign exchange reserves were held in euros at the end of 1999, a 1 percentage point increase from the combined share of identified holdings of the euro’s legacy currencies for the previous year. The Japanese yen and pound sterling each had a share of 5 percent in developing countries’ foreign exchange holdings. The share of unspecified currencies has remained at a level of 10-12 percent since the mid- 1980s.

Changes in the SDR value of foreign exchange reserves can be decomposed into quantity and valuation (price) changes (Table I.3). Official reserves held in U.S. dollars increased by SDR 79 billion, which reflects an increase of SDR 61 billion in the quantity of U.S. dollar holdings and a valuation increase of SDR 18 billion. The SDR 28 billion increase in the quantity of euro holdings was partly offset by a price decline of SDR 18 billion, resulting in a net increase of SDR 10 billion from the combined share of the euro’s legacy currencies in reserves held outside the euro area in 1998. Despite a quantity decline of SDR 6 billion, a price increase of SDR 9 billion resulted in a net increase of SDR 3 billion in holdings of Japanese yen. An increase of SDR 6 billion in holdings of pound sterling mostly reflects a quantity change, since the valuation of pound sterling holdings did not change significantly during 1999. A quantity increase of SDR 2 billion in Swiss franc holdings was partly offset by an SDR 1 billion valuation decline in 1999.



Official monetary authorities comprise central banks and also currency boards, exchange stabilization funds, and treasuries, to the extent that they perform monetary authorities’ functions.


Those foreign exchange reserves that, up to December 31, 1998, were denominated in euro-area former national currencies and private European currency units (ecus).


Although the average price of gold was lower in 1999 than in 1998, its price was higher in December 1999 than in December 1998, the relevant periods for the calculations.

APPENDIX II Financial Operations and Transactions

The tables in this appendix supplement the information in Chapter 6 on the IMF’s financial operations and policies.

Table II.1

Arrangements Approved During Financial Years Ended April 30, 1953–2000

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Table II.2

Arrangements in Effect at End of Financial Years Ended April 30, 1953–2000

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Table II.3

Stand-By Arrangements in Effect During Financial Year Ended April 30, 2000

(In millions of SDRs)

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The authorities have indicated their intention not to draw under the arrangement.

Extended from 5/28/99, 8/28/99, and 4/28/00. Augmented by SDR 17 million on 6/28/99 and SDR 17 million on 3/30/00.

Brazil’s undrawn SRF (SDR 2.6 billion) expired on 12/1/99.

Extended from 5/31/99 and 12/31/99. Augmented by SDR 0.4 million on 5/24/99.

Extended from 3/31/00.

Less than SDR 0.5 million.