## pr214-signed-chile-2020-borrowing-agreements ## Source details **Canonical URL:** [pr214-signed-chile-2020-borrowing-agreements](https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-chile-2020-borrowing-agreements.pdf) ## Other formats - [Markdown version](/-/media/files/news/press-release/2021/pr214/pr214-signed-chile-2020-borrowing-agreements.pdf.md) - [Structured JSON version](/-/media/files/news/press-release/2021/pr214/pr214-signed-chile-2020-borrowing-agreements.pdf.json) --- ### Purposes and Amounts - Central Bank of Chile agrees to lend to the Fund up to the equivalent of SDR 960 million (the “Loan Amount”). - Upon effectiveness of the increase in the Central Bank of Chile’s credit arrangement under the Fund’s New Arrangements to Borrow (the “NAB”) as part of the NAB Reform approved under Decision No. 16645-(20/5), adopted January 16, 2020, the Loan Amount will be automatically reduced to the equivalent of SDR 269 million (the “Rolled Back Loan Amount”). - Agreement based on Article VII, Section 1(i) of the Fund’s Articles of Agreement to borrow for replenishing holdings of any member’s currency in the General Resources Account (“GRA”). - Role of borrowing characterized as a temporary supplement to quota resources and framed by the Guidelines for Borrowing by the Fund. - Terminology: - Each bilateral agreement under the borrowing framework approved in March 2020: “2020 Borrowing Agreement”; collectively “2020 Borrowing Agreements”. - Each bilateral agreement under the borrowing framework approved in August 2016: “2016 Borrowing Agreement”; collectively “2016 Borrowing Agreements”. - Collectively: “Bilateral Borrowing Agreements”. ### Term of the Agreement and Use - Term: - Agreement ends on December 31, 2023. - Fund may extend the term for one further year through December 31, 2024 by Executive Board decision and with Central Bank of Chile consent. - Activation conditions: - 2020 Borrowing Agreements may be activated only after Managing Director notifies Executive Board that the Forward Commitment Capacity as defined in Decision No. 14906-(11/38), adopted April 20, 2011, taking into account all available uncommitted resources under the NAB (the “modified FCC”), is below SDR 100 billion (the “activation threshold”). - Managing Director shall not provide such notification unless: - (i) the NAB is activated as of the time of notification, or there are no available uncommitted resources under the NAB as of that time, and - (ii) activation has been approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote. - Managing Director may approach creditors before modified FCC is below activation threshold in extraordinary circumstances. - Deactivation rules: - 2020 Borrowing Agreements automatically deactivated whenever the NAB is no longer activated, unless there are no available uncommitted resources under the NAB at that time. - Deactivation also occurs if Managing Director notifies Executive Board that modified FCC (excluding Bilateral Borrowing Agreements) has risen above activation threshold and: - (i) Executive Board determines activation is no longer necessary; or - (ii) six months have elapsed since notification and during that period modified FCC (excluding Bilateral Borrowing Agreements) has not fallen below activation threshold. - If deactivated under those conditions and modified FCC later falls below activation threshold, activation provisions apply again. - Permitted uses while activated: - Fund may use resources to fund any outright purchases from the GRA during the term of the agreement. - Fund may approve commitments of GRA resources during the term whose purchases could be funded by drawings at any time during the period of such commitments, including after expiration or during periods when agreement is not activated; commitments include any whose approval caused activation threshold to be reached. - Resources may be used to fund early repayment of claims under other 2020 Borrowing Agreements if relevant creditors request early repayment as specified in paragraph 8. - Drawings may be made to fund such early repayment for as long as claims under the 2020 Borrowing Agreements remain outstanding, including after expiration or during deactivation. - Drawings shall aim to achieve over time broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to their commitments. ### Estimates, Notices, and Limits on Drawings - Prior to each plan period, Fund shall provide Central Bank of Chile its best estimates of expected drawings under this agreement and revise estimates when warranted. - Central Bank of Chile shall not be included in the periodic plan, and no drawings made under this agreement, if Chile is not included and is not proposed by the Managing Director to be included in the Financial Transactions Plan for transfers of its currency. - No drawings if Central Bank of Chile was included in the periodic plan but at drawing time Chile’s currency is not being used in transfers under the Financial Transactions Plan because of Chile’s balance of payments and reserve position. - If Chile was not included at vote on activation and is subsequently included in the Financial Transactions Plan, drawings may be made to fund purchases and commitments made during activation period unless Central Bank of Chile notifies the Fund it does not wish to be drawn upon. - Notice requirements: - At least five business days’ (Santiago) notice of intention to draw. - Payment instructions at least two business days (Fund) prior to value date by rapid authenticated means (e.g., SWIFT). - In exceptional circumstances where five business days’ (Santiago) notice is not possible, at least three business days (Santiago) notice; Central Bank of Chile to make best efforts to meet such a call. ### Evidence of Indebtedness - Outstanding drawings included in statements of Chile’s position in the Fund published monthly. - At Central Bank of Chile’s request, Fund shall issue non-negotiable instruments evidencing indebtedness arising under this agreement. - Upon repayment of an instrument and accrued interest, instrument returned for cancellation; if partial repayment, instrument returned and new instrument for remainder substituted with same maturity date. ### Maturity - Standard maturity: - Each drawing shall have a maturity date of three months from drawing date, except as provided in paragraph 5 and paragraph 8. - Fund may elect to extend maturity by additional periods of three months after initial maturity; such election deemed automatic for all outstanding drawings unless Fund notifies Central Bank of Chile at least five business days (Fund) before a maturity date that it does not elect to extend a particular drawing. - Limits on extension: - (i) maturity date of any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the date of such drawing. - (ii) maturity date for drawings to fund early repayments of other creditors’ claims per paragraph 2(e) shall be a single common maturity date that is the longest remaining maximum maturity of any claim for which early repayment requested or the tenth anniversary of the relevant drawing, whichever is earlier. - Repayment and early repayment: - Fund shall repay principal on the maturity date applicable. - After consultation, Fund may make early repayment in part or full prior to maturity with at least five business days (Fund) notice. - Repayments restore pro tanto the amount that can be drawn; extension does not reduce drawable amount. - If maturity date is not a business day where payment is to be made, payment date is next business day and interest accrues up to payment date. ### Rate of Interest - Each drawing bears interest at the SDR interest rate established by the Fund pursuant to Article XX, Section 3 of the Fund’s Articles of Agreement. - If the Fund pays an interest rate higher than the SDR interest rate on outstanding balances from any other comparable borrowing effected pursuant to Article VII, Section 1(i), for as long as that higher rate remains in effect, interest on drawings under this agreement shall be equivalent to that higher rate. - Interest calculation and payment: - Interest payable calculated on the basis of the outstanding amount of the drawing. - Interest accrues daily. - Interest paid promptly after each July 31, October 31, January 31, and April 30. ### Denomination, Media, and Modalities of Drawings and Payments - Denomination: - Each drawing and corresponding repayment denominated in SDRs. - Payment mechanics: - Unless otherwise agreed, Central Bank of Chile shall pay amount of each drawing by transfer of the SDR equivalent amount of Chilean pesos to the Fund’s account at the designated depository of Chile on the value date specified. - For drawings to fund early repayments in accordance with paragraph 2(e), Central Bank of Chile shall ensure that balances drawn that are not balances of a freely usable currency can be exchanged for a freely usable currency of its choice; for balances that are freely usable currencies, Central Bank of Chile shall collaborate to enable exchange for another freely usable currency. - Repayment currencies (unless otherwise provided in paragraph 8): - Repayment of principal shall be made, as determined by the Fund, in the currency borrowed whenever feasible, in Chilean pesos, in special drawing rights (provided it does not increase Chile’s holdings of special drawing rights above the limit under Article XIX, Section 4 unless Chile agrees), in freely usable currencies, or with agreement of Central Bank of Chile in other currencies included in the Fund’s Financial Transactions Plan. - Interest payments: - Normally made in SDRs; Fund and Central Bank of Chile may agree interest payments in Chilean pesos. - Payment destinations: - Payments in Chilean pesos to an account specified by Central Bank of Chile. - Payments in SDRs by crediting Chile’s account in the Special Drawing Rights Department. - Payments in any other currency to an account specified by Central Bank of Chile. ### Early Repayment at Request of the Central Bank of Chile - Central Bank of Chile may request early repayment at face value of all or a portion of outstanding drawings if: - (i) Central Bank of Chile represents that Chile’s balance of payments and reserve position justifies such repayment, and - (ii) Fund, giving the representation the overwhelming benefit of any doubt, determines there is a need for the early repayment as requested in light of Chile’s balance of payments and reserve position. - After consultation, Fund may make repayments under this paragraph in SDRs or a freely usable currency as determined by the Fund or, with Central Bank of Chile agreement, in currencies of other members included in the Fund’s Financial Transactions Plan. ### Transferability - General rule: - Central Bank of Chile may not transfer its obligations or claims under this agreement except with prior Fund consent and on terms the Fund approves. - Exceptions: - Central Bank of Chile may transfer at any time all or part of any claim on the Fund to: - any member of the Fund, - the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes (“other fiscal agency”), - any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3. - Conditions on transferee: - Transferee of a claim under the exceptions shall assume liability of Central Bank of Chile regarding extension of maturity of drawings related to transferred claim per paragraph 5(a). - Transferred claim held on same terms and conditions as held by Central Bank of Chile, except: - (i) transferee acquires right to request early repayment under paragraph 8 only if it is a member or central bank/other fiscal agency of a member and at transfer time the member’s balance of payments and reserve position is considered sufficiently strong for its currency to be used in transfers under the Financial Transactions Plan, - (ii) if transferee is a member or central bank/other fiscal agency of a member, reference to Chilean pesos in paragraph 7 deemed to refer to the relevant member’s currency; otherwise deemed to refer to a freely usable currency determined by the Fund, - (iii) payments related to transferred claim made to account specified by transferee, - (iv) references to business days (Santiago) deemed to refer to business days in transferee’s place. - Transfer price: - Price of a transferred claim as agreed between Central Bank of Chile and transferee. - Notification and recordation: - Central Bank of Chile shall notify Fund promptly of transfer details: claim transferred, transferee name, amount, agreed price, value date. - Transfer reflected in Fund records if in accordance with terms and conditions of paragraph 9; effective as of agreed value date. - Interest payment on transferred claim: - If claim transferred during a quarterly period described in paragraph 6(b), Fund shall pay interest to transferee on amount transferred for whole of that period. - Fund assistance: - If requested, Fund shall assist in seeking to arrange transfers. ### Effective Exchange Rate and Valuation Changes - Unless otherwise agreed, all drawings, exchanges, and payments of principal and interest under this agreement shall be made at the exchange rates for the relevant currencies in terms of the SDR established pursuant to Article XIX. - If the Fund changes the method of valuing the SDR, all transfers, exchanges and payments of principal and interest made two or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation. ### Non-Subordination, Settlement, and Cooperation - Non-Subordination: - The Fund agrees that it will not take any action that would have the effect of making the Central Bank of Chile’s claims on the Fund resulting from outstanding drawings under this agreement subordinate in any way to claims on the Fund resulting from any other borrowing effected pursuant to Article VII, Section 1(i). - Settlement of Questions: - Any question arising under this agreement shall be settled by mutual agreement between the Central Bank of Chile and the Fund. - Cooperation: - The Central Bank of Chile stands ready to cooperate with the Fund in the spirit of IMFC/G-20 commitments as needed and appropriate. ### Transitional Arrangements (Paragraph 15) - (a) Regardless of activation, the Fund: - (i) subject to paragraph 15(b), shall make drawings under this agreement to repay any outstanding claims under the Central Bank of Chile’s 2016 Borrowing Agreement, and - (ii) may make drawings under this agreement to fund purchases under commitments approved by the Fund during an activation of the 2016 Borrowing Agreements or to fund early repayment of claims under other 2016 Borrowing Agreements in case the creditor represents a balance of payments need; provided that notwithstanding paragraph 5(a) the maximum maturity date of the claim from the repayment herein shall be the residual maximum maturity date of the claim that is repaid with drawings under this agreement; and provided further that any claims under this agreement that result from the repayment herein shall be considered claims under the 2016 Borrowing Agreements for purposes of funding the early repayment of these claims in case of balance of payments need in accordance with the 2016 Borrowing Agreements, and for purposes of special calls under paragraph 23 of the Fund’s Decision No. 16645-(20/5), adopted January 16, 2020. - (b) If claims under the 2016 Borrowing Agreement or this agreement are outstanding when the increase in the Central Bank of Chile’s NAB credit arrangement becomes effective, Central Bank of Chile shall be deemed to request the Managing Director to make calls under the NAB credit arrangement up to the maximum available amount, taking into account the Fund’s need for maintaining prudential balances, to fund the repayment of such claims; provided that if the increase in the NAB credit arrangement and this agreement enter into effect at the same time, the repayment of the Central Bank of Chile’s outstanding claims under the 2016 Borrowing Agreement shall be funded first with calls under the Central Bank of Chile’s NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 15(a). - (c) If after such repayments the Central Bank of Chile’s outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount, the Fund shall repay any outstanding claims in excess of the Rolled Back Loan Amount; provided that claims with shorter remaining maximum maturities shall be repaid before those with longer remaining maximum maturities. - (d) After the entry into force of this agreement, the Fund may make no further drawing under the Central Bank of Chile’s 2016 Borrowing Agreement. - (e) No drawing under this agreement shall be made that would cause the total outstanding drawings under both this agreement and the 2016 Borrowing Agreement at the time of such drawing to: - (i) exceed the Loan Amount prior to the effectiveness of the increase in the Central Bank of Chile’s NAB credit arrangement, or - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in the Central Bank of Chile’s NAB credit arrangement; - provided that drawings beyond the Rolled Back Loan Amount under (ii) are authorized if within the same day of these drawings any resulting claim that would exceed the Rolled Back Loan Amount is repaid with a special call under the Central Bank of Chile’s NAB credit arrangement, and the Central Bank of Chile requests the Managing Director to make such calls to fund the repayment in accordance with paragraph 23 of the Fund’s Decision No. 11428-(97/6), adopted January 27, 1997 on the NAB, as amended. ### Final Provisions and Effectiveness - Execution: - This agreement may be executed in duplicate counterparts, each of which shall be deemed an original and both of which together shall constitute one instrument. - Effectiveness date: - This agreement shall become effective on the date last signed below or on the date on which Chile provides the concurrence that is required under Article VII, Section 1(i) of the Fund’s Articles of Agreement for Fund borrowing of Chilean pesos from the Central Bank of Chile, or on January 1, 2021, whichever is later. ### Signatures - For the Central Bank of Chile: - Mario Marcel, Governor - For the International Monetary Fund: - Kristalina Georgieva, Managing Director *Source: pr214-signed-chile-2020-borrowing-agreements (excerpts supplied).* ### 1. Purposes and Amounts. ### pr214-signed-chile-2020-borrowing-agreements - 1. Purposes and Amounts ### Purposes and Amounts - Central Bank of Chile agrees to lend to the Fund up to the equivalent of SDR 960 million (the “Loan Amount”). - Upon effectiveness of the increase in the Central Bank of Chile’s credit arrangement under the Fund’s New Arrangements to Borrow (the “NAB”) as part of the NAB Reform approved under Decision No. 16645-(20/5), adopted January 16, 2020, the Loan Amount will be automatically reduced to the equivalent of SDR 269 million (the “Rolled Back Loan Amount”). - Agreement based on Article VII, Section 1(i) of the Fund’s Articles of Agreement to borrow for replenishing holdings of any member’s currency in the General Resources Account (“GRA”). - Role of borrowing characterized as a temporary supplement to quota resources and framed by the Guidelines for Borrowing by the Fund. - Terminology: - Each bilateral agreement under the borrowing framework approved in March 2020: “2020 Borrowing Agreement”; collectively “2020 Borrowing Agreements”. - Each bilateral agreement under the borrowing framework approved in August 2016: “2016 Borrowing Agreement”; collectively “2016 Borrowing Agreements”. - Collectively: “Bilateral Borrowing Agreements”. ### Term of the Agreement and Use - Term: - Agreement ends on December 31, 2023. - Fund may extend the term for one further year through December 31, 2024 by Executive Board decision and with Central Bank of Chile consent. - Activation conditions (paragraph 2(b)): - 2020 Borrowing Agreements may be activated only after Managing Director notifies Executive Board that the Forward Commitment Capacity as defined in Decision No. 14906-(11/38), adopted April 20, 2011, taking into account all available uncommitted resources under the NAB (the “modified FCC”), is below SDR 100 billion (the “activation threshold”). - Managing Director shall not provide such notification unless: - (i) the NAB is activated as of the time of notification, or there are no available uncommitted resources under the NAB as of that time, and - (ii) activation has been approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote. - Managing Director may approach creditors before modified FCC is below activation threshold in extraordinary circumstances. - Deactivation rules (paragraph 2(c)): - 2020 Borrowing Agreements automatically deactivated whenever the NAB is no longer activated, unless there are no available uncommitted resources under the NAB at that time. - Deactivation also occurs if Managing Director notifies Executive Board that modified FCC (excluding Bilateral Borrowing Agreements) has risen above activation threshold and: - (i) Executive Board determines activation is no longer necessary; or - (ii) six months have elapsed since notification and during that period modified FCC (excluding Bilateral Borrowing Agreements) has not fallen below activation threshold. - If deactivated under paragraph 2(c) and modified FCC later falls below activation threshold, paragraph 2(b) provisions apply. - Permitted uses while activated (paragraph 2(d)–(e)): - Fund may use resources to fund any outright purchases from the GRA during the term of the agreement. - Fund may approve commitments of GRA resources during the term whose purchases could be funded by drawings at any time during the period of such commitments, including after expiration or during periods when agreement is not activated; commitments include any whose approval caused activation threshold to be reached. - Resources may be used to fund early repayment of claims under other 2020 Borrowing Agreements if relevant creditors request early repayment as specified in paragraph 8. - Drawings may be made to fund such early repayment for as long as claims under the 2020 Borrowing Agreements remain outstanding, including after expiration or during deactivation. - Drawings shall aim to achieve over time broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to their commitments. ### Estimates, Notices, and Limits on Drawings - Prior to each plan period, Fund shall provide Central Bank of Chile its best estimates of expected drawings under this agreement and revise estimates when warranted. - Central Bank of Chile shall not be included in the periodic plan, and no drawings made under this agreement, if Chile is not included and is not proposed by the Managing Director to be included in the Financial Transactions Plan for transfers of its currency. - No drawings if Central Bank of Chile was included in the periodic plan but at drawing time Chile’s currency is not being used in transfers under the Financial Transactions Plan because of Chile’s balance of payments and reserve position. - If Chile was not included at vote on activation and is subsequently included in the Financial Transactions Plan, drawings may be made to fund purchases and commitments made during activation period unless Central Bank of Chile notifies the Fund it does not wish to be drawn upon. - Notice requirements (paragraph 3(b)): - At least five business days’ (Santiago) notice of intention to draw. - Payment instructions at least two business days (Fund) prior to value date by rapid authenticated means (e.g., SWIFT). - In exceptional circumstances where five business days’ (Santiago) notice is not possible, at least three business days (Santiago) notice; Central Bank of Chile to make best efforts to meet such a call. ### Evidence of Indebtedness - Outstanding drawings included in statements of Chile’s position in the Fund published monthly. - At Central Bank of Chile’s request, Fund shall issue non-negotiable instruments evidencing indebtedness arising under this agreement. - Upon repayment of an instrument and accrued interest, instrument returned for cancellation; if partial repayment, instrument returned and new instrument for remainder substituted with same maturity date. ### Maturity - Standard maturity: - Each drawing shall have a maturity date of three months from drawing date, except as provided in paragraph 5 and paragraph 8. - Fund may elect to extend maturity by additional periods of three months after initial maturity; such election deemed automatic for all outstanding drawings unless Fund notifies Central Bank of Chile at least five business days (Fund) before a maturity date that it does not elect to extend a particular drawing. - Limits on extension: - (i) maturity date of any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the date of such drawing. - (ii) maturity date for drawings to fund early repayments of other creditors’ claims per paragraph 2(e) shall be a single common maturity date that is the longest remaining maximum maturity of any claim for which early repayment requested or the tenth anniversary of the relevant drawing, whichever is earlier. - Repayment and early repayment: - Fund shall repay principal on the maturity date applicable. - After consultation, Fund may make early repayment in part or full prior to maturity with at least five business days (Fund) notice. - Repayments restore pro tanto the amount that can be drawn; extension does not reduce drawable amount. - If maturity date is not a business day where payment is to be made, payment date is next business day and interest accrues up to payment date. ### Rate of Interest - Each drawing bears interest at the SDR interest rate established by the Fund pursuant to Article XX, Section 3 of the Fund’s Articles of Agreement. - If the Fund pays an interest rate higher than the SDR interest rate on outstanding balances from any other comparable borrowing effected pursuant to Article VII, Section 1(i), for as long as that higher rate remains in effect, interest on drawings under this agreement shall be equivalent to that higher rate. - Interest calculation and payment: - Interest payable calculated on the basis of the outstanding amount of the drawing. - Interest accrues daily. - Interest paid promptly after each July 31, October 31, January 31, and April 30. ### Denomination, Media, and Modalities of Drawings and Payments - Denomination: - Each drawing and corresponding repayment denominated in SDRs. - Payment mechanics: - Unless otherwise agreed, Central Bank of Chile shall pay amount of each drawing by transfer of the SDR equivalent amount of Chilean pesos to the Fund’s account at the designated depository of Chile on the value date specified. - For drawings to fund early repayments in accordance with paragraph 2(e), Central Bank of Chile shall ensure that balances drawn that are not balances of a freely usable currency can be exchanged for a freely usable currency of its choice; for balances that are freely usable currencies, Central Bank of Chile shall collaborate to enable exchange for another freely usable currency. - Repayment currencies (unless otherwise provided in paragraph 8): - Repayment of principal shall be made, as determined by the Fund, in the currency borrowed whenever feasible, in Chilean pesos, in special drawing rights (provided it does not increase Chile’s holdings of special drawing rights above the limit under Article XIX, Section 4 unless Chile agrees), in freely usable currencies, or with agreement of Central Bank of Chile in other currencies included in the Fund’s Financial Transactions Plan. - Interest payments: - Normally made in SDRs; Fund and Central Bank of Chile may agree interest payments in Chilean pesos. - Payment destinations: - Payments in Chilean pesos to an account specified by Central Bank of Chile. - Payments in SDRs by crediting Chile’s account in the Special Drawing Rights Department. - Payments in any other currency to an account specified by Central Bank of Chile. ### Early Repayment at Request of the Central Bank of Chile - Central Bank of Chile may request early repayment at face value of all or a portion of outstanding drawings if: - (i) Central Bank of Chile represents that Chile’s balance of payments and reserve position justifies such repayment, and - (ii) Fund, giving the representation the overwhelming benefit of any doubt, determines there is a need for the early repayment as requested in light of Chile’s balance of payments and reserve position. - After consultation, Fund may make repayments under this paragraph in SDRs or a freely usable currency as determined by the Fund or, with Central Bank of Chile agreement, in currencies of other members included in the Fund’s Financial Transactions Plan. ### Transferability - General rule: - Central Bank of Chile may not transfer its obligations or claims under this agreement except with prior Fund consent and on terms the Fund approves. - Exceptions (subparagraph 9(b)): - Central Bank of Chile may transfer at any time all or part of any claim on the Fund to: - any member of the Fund, - the central bank or other fiscal agency designated by any member for Article V, Section 1 purposes (“other fiscal agency”), - any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3. - Conditions on transferee: - Transferee of a claim under subparagraph (b) shall assume liability of Central Bank of Chile regarding extension of maturity of drawings related to transferred claim per paragraph 5(a). - Transferred claim held on same terms and conditions as held by Central Bank of Chile, except: - (i) transferee acquires right to request early repayment under paragraph 8 only if it is a member or central bank/other fiscal agency of a member and at transfer time the member’s balance of payments and reserve position is considered sufficiently strong for its currency to be used in transfers under the Financial Transactions Plan, - (ii) if transferee is a member or central bank/other fiscal agency of a member, reference to Chilean pesos in paragraph 7 deemed to refer to the relevant member’s currency; otherwise deemed to refer to a freely usable currency determined by the Fund, - (iii) payments related to transferred claim made to account specified by transferee, - (iv) references to business days (Santiago) deemed to refer to business days in transferee’s place. - Transfer price: - Price of a transferred claim as agreed between Central Bank of Chile and transferee. - Notification and recordation: - Central Bank of Chile shall notify Fund promptly of transfer details: claim transferred, transferee name, amount, agreed price, value date. - Transfer reflected in Fund records if in accordance with terms and conditions of paragraph 9; effective as of agreed value date. - Interest payment on transferred claim: - If claim transferred during a quarterly period described in paragraph 6(b), Fund shall pay interest to transferee on amount transferred for whole of that period. - Fund assistance: - If requested, Fund shall assist in seeking to arrange transfers. ### Effective Exchange Rate - Unless otherwise agreed, all drawings, exchanges, and payments of principal and interest under this agreement shall be made at the exchange rates for the relevant currencies in terms of the SDR established pursuant to Article XIX, *Source: pr214-signed-chile-2020-borrowing-agreements (excerpts supplied).* ### Section 7(a) of the Fund’s Articles of Agreement and the rules and regulations of the Fund ### Section 7(a) of the Fund’s Articles of Agreement and the rules and regulations of the Fund ### Changes in Method of Valuation of SDR (Paragraph 11) - If the Fund changes the method of valuing the SDR, all transfers, exchanges and payments of principal and interest made two or more business days of the Fund after the effective date of the change shall be made on the basis of the new method of valuation. ### Non-Subordination of Claims (Paragraph 12) - The Fund agrees that it will not take any action that would have the effect of making the Central Bank of Chile’s claims on the Fund resulting from outstanding drawings under this agreement subordinate in any way to claims on the Fund resulting from any other borrowing effected pursuant to Article VII, Section 1(i) of the Fund’s Articles of Agreement. ### Settlement of Questions (Paragraph 13) - Any question arising under this agreement shall be settled by mutual agreement between the Central Bank of Chile and the Fund. ### Cooperation with the Fund (Paragraph 14) - The Central Bank of Chile stands ready to cooperate with the Fund in the spirit of IMFC/G-20 commitments as needed and appropriate. ### Transitional Arrangements (Paragraph 15) - (a) Regardless of whether this agreement is activated or not, the Fund: - (i) subject to paragraph 15(b) below, shall make drawings under this agreement to repay any outstanding claims under the Central Bank of Chile’s 2016 Borrowing Agreement, and - (ii) may make drawings under this agreement to fund purchases under commitments approved by the Fund during an activation of the 2016 Borrowing Agreements or to fund early repayment of claims under other 2016 Borrowing Agreements in case the creditor represents a balance of payments need; provided that notwithstanding paragraph 5(a) of this agreement the maximum maturity date of the claim from the repayment herein shall be the residual maximum maturity date of the claim that is repaid with drawings under this agreement; and provided further that any claims under this agreement that result from the repayment herein shall be considered claims under the 2016 Borrowing Agreements for purposes of funding the early repayment of these claims in case of balance of payments need in accordance with the 2016 Borrowing Agreements, and for purposes of special calls under paragraph 23 of the Fund’s Decision No. 16645-(20/5), adopted January 16, 2020. - (b) To the extent that claims under the Central Bank of Chile’s 2016 Borrowing Agreement or this agreement are outstanding when the increase in the Central Bank of Chile’s NAB credit arrangement becomes effective, the Central Bank of Chile shall be deemed to request, in accordance with paragraph 23 of the Fund’s Decision No. 11428-(97/6), adopted January 27, 1997 on the NAB, as amended, that the Managing Director make calls under the NAB credit arrangement of the Central Bank of Chile up to the maximum available amount, taking into account the Fund’s need for maintaining prudential balances, to fund the repayment of such claims; provided that if the increase in the NAB credit arrangement of the Central Bank of Chile and this agreement enter into effect at the same time, the repayment of the Central Bank of Chile’s outstanding claims under the Central Bank of Chile’s 2016 Borrowing Agreement shall be funded first with calls under the Central Bank of Chile’s NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 15(a) above. - (c) If following the repayment of outstanding claims under the Central Bank of Chile’s 2016 Borrowing Agreement and this agreement as provided in paragraph 15(b) above, the Central Bank of Chile’s outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount, the Fund shall repay any outstanding claims under the Central Bank of Chile’s 2016 Borrowing Agreement and this agreement in excess of the Rolled Back Loan Amount; provided that claims with shorter remaining maximum maturities shall be repaid before those with longer remaining maximum maturities. - (d) After the entry into force of this agreement, the Fund may make no further drawing under the Central Bank of Chile’s 2016 Borrowing Agreement. - (e) No drawing under this agreement shall be made that would cause the total outstanding drawings under both this agreement and the 2016 Borrowing Agreement between the Central Bank of Chile and the Fund, at the time of such drawing, to: - (i) exceed the Loan Amount prior to the effectiveness of the increase in the Central Bank of Chile’s NAB credit arrangement, or - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in the Central Bank of Chile’s NAB credit arrangement; - provided that drawings beyond the Rolled Back Loan Amount under (ii) herein are authorized, if within the same day of these drawings any resulting claim that would exceed the Rolled Back Loan Amount is repaid with a special call under the Central Bank of Chile’s NAB credit arrangement, and the Central Bank of Chile hereby requests the Managing Director to make such calls to fund the repayment in accordance with paragraph 23 of the Fund’s Decision No. 11428-(97/6), adopted January 27, 1997 on the NAB, as amended. ### Final Provisions (Paragraph 16) - (a) This agreement may be executed in duplicate counterparts, each of which shall be deemed an original and both of which together shall constitute but one and the same instrument. - (b) This agreement shall become effective on the date last signed below or on the date on which Chile provides the concurrence that is required under Article VII, Section 1(i) of the Fund’s Articles of Agreement for Fund borrowing of Chilean pesos from the Central Bank of Chile, or on January 1, 2021, whichever is later. ### Signatures - For the Central Bank of Chile: - Mario Marcel, Governor - For the International Monetary Fund: - Kristalina Georgieva, Managing Director *Source: pr214-signed-chile-2020-borrowing-agreements - Section 7(a) of the Fund’s Articles of Agreement and the rules and regulations of the Fund* --- _Source: https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-chile-2020-borrowing-agreements.pdf_