This 2003 Annual Report highlights that during FY2003, the IMF held bilateral (country) discussions with 136 members. It also took a number of steps to enhance the effectiveness of its surveillance and crisis prevention work. Among these efforts, it continued to develop a system to assess countries’ vulnerability to balance-of-payments crises. The Executive Board proposed improvements to assessment exercises under the IMF’s standards and codes initiative and the joint IMF-World Bank Financial Sector Assessment Program (FSAP), and supported proposals to enhance data provision for surveillance.



Appendix I

International Reserves

Total international reserves, including gold, increased by 9 percent during 2002 and stood at SDR 2.1 trillion at the end of the year (Table I.1). Foreign exchange reserves, which constitute the largest component of official reserve holdings, grew by 8 percent, to SDR 1.8 trillion. IMF-related assets, which make up the rest of nongold reserves, increased by 12 percent, to SDR 86 billion. The market value of gold held by monetary authorities increased by 13 percent in 2002, to SDR 235 billion at year-end.1

Foreign Exchange Reserves

Foreign exchange reserves represented 95 percent of nongold assets at the end of 2002. The developing countries, which held 63 percent of all foreign exchange reserves at the end of 2002, increased their holdings by 10 percent, to SDR 1.1 trillion, following comparable increases in the previous two years. During 2002, the foreign exchange holdings of industrial countries rose by 5 percent, to SDR 653 billion.

In 2002, the foreign exchange assets of the oil-exporting developing countries, which amount to about 10 percent of all developing countries’ foreign exchange reserves, declined by 2 percent, to SDR 103 billion. Foreign exchange reserves of the net creditor developing country group rose by 11 percent, to SDR 222 billion, and those of net debtor countries grew by 10 percent, to SDR 889 billion at the end of 2002. Foreign exchange reserves of net debtors without debt-servicing problems increased by 13 percent, to SDR 753 billion, while those of countries with debt-servicing problems decreased by 4 percent, to SDR 136 billion.

Holdings of IMF-Related Assets

During 2002, total IMF-related assets (that is, reserve positions in the IMF and SDRs) increased by 12 percent, following an increase of 16 percent in the preceding year. Industrial countries hold a majority of IMF-related assets: 81 percent at the end of 2002. The increase in IMF-related assets was attributable mainly to a 16 percent growth in members’ reserve positions in the IMF—which consist of members’ reserve tranche and creditor positions—to SDR 66 billion. SDR holdings of IMF members have remained broadly constant at SDR 20 billion.

Gold Reserves

The market value of gold reserves increased by 13 percent, to SDR 235 billion, reflecting an increase of 14 percent in the SDR price of gold in 2002; the physical stock of official gold declined by 1 percent. The share of gold in officially held reserves declined gradually to 11 percent by the end of 2002, whereas in the early 1980s gold comprised about half of all officially held reserves. Most of the gold reserves (83 percent) are held by industrial countries: gold constituted 21 percent of these countries’ total reserves at the end of 2002. Gold reserves accounted for 4 percent of the total reserves of the developing countries.

Developments During the First Quarter of 2003

During the first quarter of 2003, total reserve assets rose by SDR 43 billion, whereas foreign exchange reserves increased by SDR 50 billion over the same period. Reflecting a decline in the SDR price of gold since the end of 2002, the market value of gold reserves declined by SDR 9 billion during the first quarter of 2003, while the physical stock of official gold declined by SDR 4 billion. Holdings of IMF-related assets increased by SDR 2 billion.

Currency Composition of Foreign Exchange Reserves

The currency composition of foreign exchange reserves has changed gradually over the past decade, with the share of U.S. dollar holdings in foreign exchange reserves rising from 57 percent in 1993 to 68 percent in 1999 and staying at that level through the end of 2001 (Table I.2). In 2002, however, the share of U.S. dollar holdings declined slightly, to 65 percent, with euro holdings gaining share. The euro, which replaced 11 European currencies and the European currency unit (ECU) on January 1, 1999, accounted for 15 percent of total foreign exchange reserves in 2002, somewhat higher than its average since 1999. Given that, at the introduction of the euro, the Eurosystem’s reserves previously denominated in euro legacy currencies2 became domestic assets of the euro area, the share of the euro in 1999-2002 is not directly comparable with the previous years’ combined share of the four euro legacy currencies identified in Table I.2: deutsche mark, French franc, Netherlands guilder, and private ECU. However, after adjusting the data to take into account only holdings of these currencies outside the euro area, their combined share in 1998 was virtually identical to the share of the euro in 1999.

Table I.1

Official Holdings of Reserve Assets1

(In billions of SDRs)

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

End of year figures for all years except 2003. “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 countries or area.

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.

Only IMF member countries that report their official holdings of foreign exchange are included in this table.

Not comparable with the combined share of euro legacy currencies in previous years because it excludes the euros received by euro-area members when their previous holdings of other euro-area members’ legacy currencies were converted into euros on January 1, 1999.

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 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 3U.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. On January 1, 1999, these holdings were automatically converted 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.

The share of the Japanese yen in total foreign exchange reserves declined from 8 percent at end-1993 to 5 percent at the end of 1997 and stayed at about that level through 2002. During the past decade, the share of pound sterling has remained around 3 and 4 percent, and that of the Swiss franc approximately 1 percent. The share of unspecified currencies, which include currencies not identified in Table I.2, as well as foreign exchange reserves for which no information on currency composition is available, rose to 11 percent in 2002.

For industrial countries, the share of U.S. dollar holdings increased throughout the 1990s to reach 73 percent in 2001 and declined to 70 percent at the end of 2002. The shares of the euro in those countries’ foreign exchange reserves rose to 11 percent in 2002, whereas that of the Japanese yen declined by less than 1 percentage point. Shares of pound sterling and the Swiss franc have been practically unchanged over the past ten years, but the share of unspecified currencies rose to 11 percent in 2002.

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 total 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.

The share of the U.S. dollar in developing countries’ foreign exchange reserves declined to 61 percent in 2002, at the lower end of historical values over the past decade. Holdings of the euro rose to 17 percent of those countries’ foreign exchange reserves, 1 percentage point higher than its share in 2001. During the past decade, the share of the Japanese yen has gradually decreased by about 3 percentage points, to 4 percent at the end of 2002, while the share of pound sterling has increased by about 2 percentage points, to 6 percent. The share of the Swiss franc has remained virtually unchanged at 1 percent since 1997. Unspecified currencies accounted for 11 percent of developing countries’ foreign exchange reserves in 2002.

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 30 billion in 2002, as an increase of SDR 113 billion in the quantity of U.S. dollar holdings was offset by a valuation decline of SDR 83 billion. Euro holdings increased by SDR 38 billion, reflecting a quantity increase of SDR 17 billion and a valuation increase of SDR 21 billion. Japanese yen holdings remained unchanged, as a quantity decline offset a valuation increase. Pound sterling and Swiss franc holdings increased by SDR 11 billion and SDR 2 billion, respectively, reflecting increases in both quantity and valuation.


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 ECUs.

Appendix II

Financial Operations and Transactions

The tables in this appendix supplement the information given in Chapter 8 on the IMF’s financial operations and policies. Components may not sum to total because of rounding.

Table II.1

Arrangements Approved During Financial Years Ended April 30, 1953-2003

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Includes augmentations less approved reductions of committed amounts.

Table II.2

Arrangement in Effect at the End of Financial Year 1991-20031

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Certain figures have been restated to exclude expired arrangements.

Table II.3

Stand-By and Extended Arrangements in Effect During Financial Year Ended April 30, 2003

(In millions of SDRs)

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Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Table II.4

Arrangements Under the Poverty Reduction and Growth Facility in Effect During Financial Year Ended April 30, 2003

(In millions of SDRs)

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Extended from 7/16/03.

Extended from 9/17/01.

Extended from 9/9/02.

Extended from 10/21/02.

Extended from 1/6/03.

Extended from 10/17/02.

Extended from 5/2/02.

Extended from 3/25/02.

Became inoperative on 1/13/03.

Extended from 2/29/04.

Extended from 8/05/02.

Extended from 7/20/02.

Extended from 6/27/02.

Extended from 4/3/03.

Augmented by SDR 24.45 million on 5/29/02. Extended from 3/24/02.