• Abstract and Figures
• Public Full-text

International Monetary Fund 945 Chapter IX International Monetary Fund (IMF) The International Monetary Fund (IMF), a forum adjustment. The facilities and policies through in which its member States discuss global mone- which it provided such support differed, depend- tary issues and related economic matters, aims to ing on the nature of the macro-economic and assist them to develop sound policies and so en- structural problems to be addressed and the gender a stable international economic and finan- terms and degree of conditionality attached to cial environment. The Fund provides members them. with advice on economic and financial policies, Stand-by arrangements, typically covering lends money to members that are undertaking eco- periods of one or two years, focus on specific nomic reforms to overcome balance-of-payments macro-economic policies, such as exchange rate difficulties and makes available to them informa- and interest policies, aimed at overcoming tion and technical assistance. balance-of-payments difficulties. Extended ar- Each member contributes to IMF’s pool of rangements, which support medium-term pro- financial resources an amount of money, called a grammes generally running for three years, are quota subscription, roughly proportional to its available to overcome more intractable balance- standing in the world economy. As at December of-payment difficulties, attributable to structural 1988, aggregate quotas, measured in special draw- as well as macro-economic problems. ing rights (SDRs)-the Fund’s unit of account- In September, the Interim Committee of the amounted to SDR 90 billion ($130 billion). The Board of Governors on the International Mone- amount a member has contributed determines its tary System, a 22-member advisory body repre- voting power and how much it can borrow from senting the same constituencies as in the Fund’s the Fund. Executive Board (see Annex II), recommended The IMF Board of Governors-the minister of the continuation of the enlarged access policy, finance or the head of the central bank of each mem- financed by borrowed resources, and the main- ber country-is the highest decision-making body tenance of the limits on the use of Fund in the Fund. The 22 Executive Directors, repre- resources in effect. Under the enlarged access senting all IMF members, see to it that the decisions policy, the limit on annual access under a stand- of the Board are carried out by the IMF staff. by or an extended arrangement continued to be During fiscal year 1988 (1 May 1987 to 30 April 90 per cent or 110 per cent of quota; the cumula- 1988), IMF continued to fulfil its surveillance man- tive access limit remained at 400 or 440 per cent date of the international monetary system, par- of quota, depending on the size and nature of the ticularly the exchange rate policies of its members, member’s balance-of-payments need and the by examining each member’s policies and per- strength of its adjustment efforts. formance and through regular discussions of the The structural adjustment facility (SAF), world economic outlook. launched in 1986,b continued to provide loans on IMF holds regular consultations with each concessional terms to low-income countries facing - member country, which allows it to appraise the protracted balance-of-payments problems. country’s overall economic situation and policies, In April 1988, the enhanced structural adjust- c discuss policy options and make recommenda- ment facility (ESAF), established in 1987 to pro- tions. Consultations continued in response to vide additional assistance to low-income coun- modifications to the guidelines on the frequency tries undertaking structural adjustments, a of consultations introduced in 1987. The num- became operational. Access under ESAF was ex- ber of consultations concluded in 1988 fell to 110 pected to average 150 per cent of quota over a (74 per cent of membership) from 115 (75 per cent) three-year programme period, with provision for in 1987. up to 350 per cent in exceptional circumstances. At the end of 1988, the membership of IMF re- The compensatory financing facility, designed mained unchanged at 151 (see Annex I). to help stabilize the earnings of countries export- ing primary commodities, was superseded in Au- IMF facilities and policies aYUN 1987, p. 1251. IMF provided member States with financial bYUN 1986, p. 1159. resources in support of programmes of economic CYUN 1987, p. 1252. 946 intergovernmental organizations gust by the compensatory and contingency financ- Liquidity ing facility, which added a mechanism for contin- AS at 30 April 1988, the Fund’s usable ordinary gency financing of member States that had entered resources totalled SDR 41 billion, compared with into adjustment programmes supported by the SDR 39.3 billion at the end of the preceding fiscal Fund. Under the compensatory features of the fa- year. cility, the Fund compensated members for levels The Fund borrowed from official lenders to sup- of export earnings or cereal import costs that plement its resources and to finance members’ deviated from medium-term trends. Under the purchases under the enlarged access policy. The contingency features, the Fund provided addi- total amount of borrowed resources available at the tional financing to countries whose programmes end of fiscal 1988 declined to SDR 5.3 billion from might be threatened by external disruptions that SDR 7.1 billion at the end of fiscal 1987. might cause economic variables to deviate from The Fund borrowed SDR 1.3 billion and repaid those originally forecasted under the adjustment SDR 4.9 billion, resulting in a net decrease in total programme. outstanding borrowing of SDR 3.6 billion, from Under the buffer stock financing facility, IMF SDR 12.7 billion at the end of fiscal 1987 to SDR provided resources to help finance members’ con- 9.1 billion at the end of fiscal 1988. tributions to approved buffer stocks of com- modities. SDR activity Total transfers of SDRS increased in 1988 to SDR Financial assistance 19.9 billion from SDR 15.6 in 1987. While trans- During 1988, there were sharp increases in the actions with designation continued to decline, use of Fund resources by members under the com- voluntary transfers among participants and pensatory financing facility. Drawings by seven prescribed holders increased sharply by 87 per members totalled SDR 1.5 billion (compared to cent, resulting in a 50 per cent rise in total trans- purchases by eight members of SDR 593 million fers among them to SDR 9.5 billion. The volume in fiscal year 1987). Amounts agreed under stand- of SDR transfers involving prescribed holders by and extended arrangements and SAF totalled nearly tripled, to SDR 1.9 billion from SDR 0.68 SDR 4.54 billion. billion during fiscal 1987. The number of IMF financial arrangements in The amount of SDRS transferred between par- effect increased to 45 at the end of fiscal 1988, com- ticipants and IMF increased by 12 per cent over pared to 34 at the end of 1987. As at 30 April 1988, the previous fiscal year. Transfers from participants there were 18 stand-by arrangements (Argentina, to the General Resources Account increased by 8 Central African Republic, Costa Rica, Côte per cent to SDR 4.61 billion. Transfers from that d’Ivoire, Ecuador, Egypt, Gabon, Guinea, Account to participants in purchases, remunera- Jamaica, Kenya, Malawi, Mauritania, Philippines, tion payments, sales to members needing SDRS for Senegal, Somalia, Togo, Tunisia, Zaire); 2 ex- payments of charges, and interest payments on and tended arrangements (Chile, Ghana); and 25 SAF repayments of Fund borrowings increased by 15 arrangements (Bangladesh, Bolivia, Burundi, per cent to SDR 5.8 billion. Central African Republic, Chad, Dominica, Gam- bia, Ghana, Guinea, Guinea-Bissau, Haiti, Kenya, Madagascar, Mauritania, Mozambique, Nepal, Policy on arrears Niger, Senegal, Sierra Leone, Somalia, Sri Lanka, The continued delay by some members in dis- Togo, Uganda, United Republic of Tanzania, charging financial obligations to the Fund was of Zaire). increasing concern during the fiscal year. Total At the end of fiscal year 1988, credit outstand- overdue obligations rose from SDR 1.19 billion at ing in the General Resources Account was SDR the end of fiscal 1987 to SDR 1.94 billion at the end 27.83 billion, a decline of SDR 3.8 billion com- of fiscal 1988. The number of members in arrears pared to 1987. by six months or more rose by one, to nine. Dur- Purchases, or drawings, on IMF'S resources in- ing 1988, three members were declared ineligible cluded SDR 1.7 billion under stand-by arrange- to use the general resources of the Fund in view ments, SDR 260 million under extended arrange- of their overdue obligations to the General Depart- ments and SDR 1.54 billion under the ment. Earlier declarations of ineligibility with re- compensatory financing facility. Two countries had spect to five members remained in effect. purchases outstanding totalling SDR 3 million in Concerned by the continued increase of over- the buffer stock financing facility. As at 30 April due obligations, the Interim Committee in April 1988, loan disbursements under SAF totalled SDR 1988 requested the Executive Board to prepare a 1.36 billion, with undisbursed commitments total- report on measures to reduce, and eventually elim- ling SDR 0.77 billion. inate, arrears to the Fund. International Monetary Fund 947 Technical assistance and training IMF-World Bank collaboration Technical assistance continued to be an impor- Collaboration between IMF and the World Bank tant part of IMF services to its members, focus- intensified during fiscal 1988. Co-operation con- ing on general economic policy, balance-of- sisted of joint participation in missions, attendance payments adjustment programmes, legal mat- at each other’s Executive Board meetings, the regular ters, debt management, problems arising from exchange of documents and information, and at- inflation, exchange and trade systems, public fi- tendance at and participation in conferences and nance issues, financial sector issues, accounting, seminars.

Load more

  5

Copy Link