Copyright Page
APPLICATIONS TO BECOME HOLDERS OF SDRS
February 2023
IMF staff regularly produces papers proposing new IMF policies, exploring options for reform, or reviewing existing IMF policies and operations. The following document(s) have been released and are included in this package:
A Press Release.
The Staff Report prepared by IMF staff and completed on January 23, 2023, for the Executive Board’s consideration on a lapse-of-time basis.
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
Electronic copies of IMF Policy Papers are available to the public from http://www.imf.org/external/pp/ppindex.aspx
International Monetary Fund
Washington, D.C.
© 20[xx] International Monetary Fund
Press Release
PR[23/47]
IMF Executive Board Approves the Applications of Five Institutions to Become Holders of Special Drawing Rights
FOR IMMEDIATE RELEASE
Washington, DC –February 21, 2023: The Executive Board of the International Monetary Fund (IMF) approved on February 8, 2023 the applications of the Caribbean Development Bank (CDB), the Development Bank of Latin America (known as Corporacion Andina de Fomento or CAF), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the Inter-American Development Bank (IADB) to become prescribed holders of Special Drawings Rights (SDRs), an international reserve asset created by the Fund to help meet the long-term global need to supplement reserves. Approval of these institutions brings the number of prescribed holders to twenty (see attached list).
Prescribed holders may acquire, hold and use SDRs in operations with other prescribed holders and participants in the SDR Department. The SDR Department maintains records on SDR transactions, holdings, and allocations. All IMF members are currently participants in the SDR Department. Under current IMF decisions, prescribed holders may exchange SDRs for currency, and use SDRs in certain operations, including loans, settlement of financial obligations, swaps, pledges, transfer as security for the performance of financial obligations, forwards, and donations. Prescribed holders may elect to participate in the SDR Voluntary Trading Agreements (VTAs) or enter into bilateral agreements to conduct their exchanges of SDRs. Unlike participants in the SDR Department, prescribed holders do not receive allocations of SDRs, and they may not request an exchange of SDRs in transactions with designation.1
As a background, the IMF’s Articles of Agreement authorize the Fund to prescribe as holders of SDRs (i) non-members, (ii) members that are not participants in the SDR Department, (iii) institutions that perform functions of a central bank for one or more IMF member countries, and (iv) other official entities. The five applicants approved today are all “other official entities”.
Attachment
Following the Executive Board’s decision, the following institutions are currently the prescribed holders of SDRs:
African Development Bank (AFDB)
African Development Fund (AFDF)
Arab Monetary Fund (AMF)
Asian Development Bank (ADB)
Bank for International Settlements (BIS)
Bank of Central African States (BEAC)
Caribbean Development Bank (CDB)
Central Bank of West African States (BCEAO)
Development Bank of Latin America (Corporacion Andina de Fomento or CAF)
Eastern Caribbean Central Bank (ECCB)
European Central Bank (ECB)
European Bank for Reconstruction and Development (EBRD)
European Investment Bank (EIB)
Inter-American Development Bank (IADB)
International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA)
International Fund for Agricultural Development
Islamic Development Bank
Latin American Reserve Fund (FLAR) – Former Andean Reserve Fund
Nordic Investment Bank
Title page
APPLICATIONS TO BECOME HOLDERS OF SDRS
January 23, 2023
EXECUTIVE SUMMARY
This paper presents for the Executive Board’s consideration five applications by official entities to become prescribed holders of SDRs. The entities that have submitted formal applications to become prescribed holders of SDRs are the Caribbean Development Bank (CDB), the Development Bank of Latin America (known as Corporacion Andina de Fomento or CAF), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the Inter-American Development Bank (IADB). These institutions are all well-established multilateral financial institutions and are eligible to be prescribed as holders of SDRs in accordance with Article XVII, Section 3 (i) of the Articles of Agreement.
Staff recommends that the Executive Board prescribe the five applicants as holders of SDRs.
Approved By
Bernard Lauwers (FIN) and Rhoda Weeks-Brown (LEG)
Prepared by The Finance and Legal Departments. The team was led by M. Gororo and M. Nkusu (both FIN), and H. Pham and J. Swanepoel (both LEG); and comprised Q. Chen and B. Oliveira (both FIN) and E. Kabundu (LEG). J. Khaw and C. Sdralevich (both FIN) provided overall guidance, under the supervision of A. Bauer (FIN) and B. Steinki (LEG). R. Flores and A. Mahdi (FIN) helped prepare the report.
Contents
INTRODUCTION
LEGAL FRAMEWORK FOR BECOMING A PRESCRIBED HOLDER
EXPERIENCE WITH EXISTING PRESCRIBED HOLDERS
ASSESSMENT OF THE ELIGIBILITY OF THE APPLICANTS AND IMPLICATIONS OF THEIR PRESCRIPTION AS SDR HOLDERS
STAFF RECOMMENDATION
BOX
1. IMF Prescribed Holders and Year of Approval of Prescribed Holder Status
ANNEXES
I. Terms and Conditions for Acceptance, Holding, and Use of Special Drawing Rights by Other Holders
II. Summary Information on the Applicants
III. Letters Submitted by Applicants
For additional information please see IMF Financial Operations Handbook, including Box 4.9 on the designation mechanism.
