## Loan Agreement between the Swiss National Bank and the International Monetary Fund

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**Canonical URL:** [Loan Agreement between the Swiss National Bank and the International Monetary Fund](https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-switzerland-2020-borrowing-agreements.pdf)

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---

### Purposes and Amounts
- Purpose: enhance resources available on a temporary basis to the International Monetary Fund (the "Fund") for crisis prevention and resolution through bilateral borrowing.
- Loan Amount: SOR-denominated amount up to the equivalent of Swiss franc (CHF) 8,500 million (the "Loan Amount").
- Rolled Back Loan Amount: upon effectiveness of the NAB Reform, the Loan Amount will be automatically reduced to an SOR-denominated amount up to the equivalent of CHF 3,662 million (the "Rolled Back Loan Amount").
- Legal basis: Article VII, Section 1(i) of the Fund's Articles of Agreement and the Guidelines for Borrowing by the Fund.
- Terminology:
  - "2020 Borrowing Agreement" — this agreement and other bilateral borrowing agreements entered into or amended pursuant to the March 2020 framework.
  - "2016 Borrowing Agreement" — bilateral borrowing agreements entered pursuant to the August 2016 framework.
  - Collectively: "Bilateral Borrowing Agreements".

### Term, Activation, Deactivation, and Use
- Term: ends on December 31, 2023.
- Extension: Fund may extend term for one further year through December 31, 2024 by Executive Board decision and SNB consent.
- Activation prerequisites (before notification):
  - Modified FCC is below SOR 100 billion (the "activation threshold").
  - NAB is activated at time of notification, or there are no available uncommitted resources under the NAB at that time.
  - Activation approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote.
- Voting mechanics:
  - Managing Director proposes activation in writing and requests creditors' vote.
  - Creditor ineligible to vote if its 2020 Borrowing Agreement is not effective at vote time or the relevant member is not included in the Fund's Financial Transactions Plan for transfers of its currency.
  - Managing Director may approach creditors before modified FCC is below threshold in extraordinary circumstances.
- Deactivation triggers:
  - Automatic deactivation when NAB is no longer activated, unless no available uncommitted resources under the NAB at that time.
  - Deactivation if Managing Director notifies Executive Board that modified FCC (excluding Bilateral Borrowing Agreements) has risen above activation threshold and either:
    - Executive Board determines activation no longer necessary; or
    - Six months have elapsed since notification and modified FCC (excluding Bilateral Borrowing Agreements) has not fallen below activation threshold.
  - If deactivated under this paragraph and modified FCC later falls below activation threshold, paragraph 2(b) provisions apply.
- Uses while activated:
  - Fund may use resources to fund outright purchases from the GRA during the term.
  - Fund may approve commitments of GRA resources whose purchases could be funded by drawings under this agreement at any time during such commitments, including after expiration of the term, subject to conditions.
  - Resources may be used to fund early repayment of claims under other 2020 Borrowing Agreements if requested by relevant creditors (paragraph 2(e)).
- Drawing objective: achieve over time broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to commitments.

### Drawings, Estimates, Notices, and Evidence of Indebtedness
- Estimates and notices:
  - Prior to each plan period the Fund shall provide SNB best estimates of expected drawings; revised estimates during each period as warranted.
  - Standard notice: at least five business days' (Zurich) notice of intention to draw; payment instructions at least two business days (Fund) prior to value date by rapid authenticated means (e.g., SWIFT).
  - Exceptional circumstances: at least three business days (Zurich) notice if five business days not possible; SNB to make best efforts to meet such a call.
- Exclusions on drawings:
  - No drawings under this agreement if Switzerland is not included in the Financial Transactions Plan for transfers of its currency or if Switzerland's currency is not used in transfers under the Financial Transactions Plan because of Switzerland's balance of payments and reserve position.
  - If Switzerland subsequently included after activation vote, drawings may be made to fund purchases made and commitments approved during activation unless SNB notifies Fund otherwise.
- Reporting and instruments:
  - Outstanding drawings included in statements of Switzerland's position in the Fund published monthly.
  - At SNB request, Fund shall issue non-negotiable instruments evidencing indebtedness; upon repayment instrument returned for cancellation or substituted in case of partial repayment.

### Maturity, Repayment Mechanics, and Early Repayment
- Standard maturity: each drawing has a maturity date of three months from drawing date.
- Extensions:
  - Fund may elect to extend maturity in additional periods of three months after initial maturity.
  - Extension deemed elected automatically for all drawings unless Fund notifies SNB at least five business days (Fund) before a maturity date that it does not elect to extend.
  - Limits:
    - Maturity for any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the drawing date.
    - Maturity for drawings to fund early repayments of other creditors' claims shall be a single common maturity date equal to the longest remaining maximum maturity of any claim for which early repayment requested or the tenth anniversary of the drawing date, whichever is earlier.
- Repayment mechanics:
  - Fund repays principal on maturity date.
  - Fund may make early repayment in part or full after consultation with SNB, with at least five business days (Fund) prior notice.
  - Repayments restore pro tanto the amount available to be drawn; extension of maturity does not reduce drawable amount.
  - If maturity date not a business day where payment made, payment date is next business day and interest accrues to payment date.
- Early repayment at SNB request:
  - SNB can request early repayment at face value of all or part of outstanding drawings if:
    - (i) SNB represents Switzerland's balance of payments and reserve position justifies repayment, and
    - (ii) Fund, giving that representation the overwhelming benefit of any doubt, determines need for early repayment in light of Switzerland's balance of payments and reserve position.
  - Repayments under this paragraph may be made in SDRs or a freely usable currency as determined by the Fund, or with SNB agreement in currencies included in Fund's Financial Transactions Plan for transfers.

### Rate of Interest and Interest Payments
- Interest rate:
  - Each drawing bears interest at the SOR interest rate established by the Fund pursuant to Article XX, Section 3.
  - If Fund pays higher rate on comparable borrowing under Article VII, Section 1(i), interest payable on drawings under this agreement shall be equivalent to that higher rate while it remains in effect.
- Interest calculation and payment:
  - Interest calculated on outstanding amount of the drawing.
  - Interest accrues daily.
  - Interest paid promptly by the Fund after each July 31, October 31, January 31, and April 30.

### Denomination, Payment Modalities, and Exchange Rates
- Denomination: each drawing and corresponding repayment denominated in SDRs.
- Payment mechanics:
  - SNB pays SOR equivalent amount of CHF to the Fund's account at designated depository of Switzerland on the value date specified.
  - For drawings under paragraph 2(e), SNB ensures balances drawn that are not freely usable can be exchanged for a freely usable currency of its choice; for balances in a freely usable currency, SNB shall collaborate to enable exchange for another freely usable currency.
- Repayment currency options (as determined by the Fund, subject to provisions):
  - In the currency borrowed whenever feasible,
  - In CHF,
  - In special drawing rights (subject to Article XIX, Section 4 limit unless Switzerland agrees to accept SDRs above that limit),
  - In freely usable currencies,
  - With SNB agreement, in other currencies included in Fund's Financial Transactions Plan for transfers.
- Interest payments: normally in SDRs; Fund and SNB may agree interest payments be made in CHF.
- Payment accounts:
  - Payments in CHF to account specified by SNB.
  - Payments in SDRs by crediting Switzerland's account in the Special Drawing Rights Department.
  - Payments in any other currency to account specified by SNB.
- Effective exchange rate:
  - Unless otherwise agreed, all drawings, exchanges, and payments of principal and interest shall be made at the exchange rates for the relevant currencies in terms of the SDR established pursuant to Article XIX, Section 7(a) for the second business day of the Fund before the value date of the transfer, exchange or payment.
- Exchange rate determination and valuation rules:
  - If the exchange rate determination date is not a business day in Zurich, such date shall be the last preceding business day of the Fund that is also a business day in Zurich.
  - For applying limits on drawings specified in paragraphs 1(a), 14(c) and 14(e), the CHF value of each SOR-denominated drawing shall be determined and permanently fixed on the value date of the drawing based on the CHF/SOR exchange rate established pursuant to Article XIX, Section 7(a) for the second business day of the Fund before the value date of the drawing.
- Changes in method of valuation:
  - If the Fund changes the method of valuing the SOR, 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.

### Transferability of Claims and Obligations
- General restriction: SNB may not transfer obligations or claims under this agreement except with prior Fund consent and on Fund-approved terms.
- Permitted transfers:
  - SNB may transfer all or part of any claim to any member, to central bank or other fiscal agency designated by any member for Article V, Section 1 purposes ("other fiscal agency"), or to any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3.
- Conditions on transferee:
  - Transferee assumes SNB liability regarding extension of maturity for transferred claim.
  - Transferred claim held on same terms as by SNB, 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 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 its central bank/other fiscal agency, references to CHF in paragraph 7 deemed to refer to currency of relevant member; 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 (Zurich) deemed to refer to business days where transferee is situated.
- Price and notification:
  - Price of transferred claim as agreed between SNB and transferee.
  - SNB shall notify Fund promptly of claim transferred, transferee name, amount, agreed price, and value date.
  - Transfer reflected in Fund records if in accordance with paragraph 9 terms; effective as of agreed value date.
- Interest payment adjustment:
  - If claim transferred during a quarterly period as described in paragraph 6(b), Fund shall pay interest to transferee on amount transferred for the whole of that period.
- Fund assistance: Fund shall assist in seeking to arrange transfers if requested.

### Transitional Arrangements (paragraph 14)
- (a) Regardless of activation, the Fund:
  - (i) subject to paragraph 14(b), shall make drawings under this agreement to repay any outstanding claims under the SNB'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 SNB's 2016 Borrowing Agreement or this agreement are outstanding when the increase in the SNB's NAB credit arrangement becomes effective, the SNB shall be deemed to request that the Managing Director make calls under the NAB credit arrangement of the SNB 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 SNB and this agreement enter into effect at the same time, the repayment of the SNB's outstanding claims under the SNB's 2016 Borrowing Agreement shall be funded first with calls under the SNB's NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 14(a).
- (c) If following the repayment of outstanding claims under the SNB's 2016 Borrowing Agreement and this agreement as provided in paragraph 14(b), the SNB's outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount as calculated pursuant to paragraph 10(b), the Fund shall repay any outstanding claims under the SNB'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 SNB'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 SNS and the Fund, at the time of such drawing, to:
  - (i) exceed the Loan Amount prior to the effectiveness of the increase in the SNB's NAB credit arrangement, or
  - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in the SNB's NAB credit arrangement, as calculated pursuant to paragraph 10(b);
  - 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 SNB's NAB credit arrangement, and the SNB 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.

### Non-Subordination, Settlement, Final Provisions, and Signatures
- Non-subordination of claims:
  - The Fund agrees that it will not take any action that would have the effect of making the SNB'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 SNB and the Fund.
- Final Provisions:
  - (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 Switzerland provides the concurrence that is required under Article VII, Section 1 (i) of the Fund's Articles of Agreement for Fund borrowing of CHF from the SNB, or on January 1, 2021, whichever is later.
- Signatures and dates:
  - For the Swiss National Bank:
    - Chairman of the Governing Board: Fritz Zurbrugg
    - Vice Chairman of the Governing Board: Fritz Zurbrugg (appears twice in the signature block)
  - For the International Monetary Fund:
    - Kristalina Georgieva, Managing Director
  - Additional signatory listed:
    - Thomas Jordan, Chairman of the Governing Board
  - Dates shown: Date entries and signature dates including September 18, 2020.

*Loan Agreement between the Swiss National Bank and the International Monetary Fund (Section 1 and Section 2).*

### Section 1

### Loan Agreement between the Swiss National Bank and the International Monetary Fund

### Purposes and Amounts
- Purpose: enhance resources available on a temporary basis to the International Monetary Fund (the "Fund") for crisis prevention and resolution through bilateral borrowing.
- Loan Amount: SOR-denominated amount up to the equivalent of Swiss franc (CHF) 8,500 million (the "Loan Amount").
- Rolled Back Loan Amount: upon effectiveness of the NAB Reform, the Loan Amount will be automatically reduced to an SOR-denominated amount up to the equivalent of CHF 3,662 million (the "Rolled Back Loan Amount").
- Legal basis: Article VII, Section 1(i) of the Fund's Articles of Agreement and the Guidelines for Borrowing by the Fund.
- Terminology:
  - "2020 Borrowing Agreement" — this agreement and other bilateral borrowing agreements entered into or amended pursuant to the March 2020 framework.
  - "2016 Borrowing Agreement" — bilateral borrowing agreements entered pursuant to the August 2016 framework.
  - Collectively: "Bilateral Borrowing Agreements".

### Term of the Agreement and Use
- Term: ends on December 31, 2023.
- Extension: Fund may extend term for one further year through December 31, 2024 by Executive Board decision and SNB consent.
- Activation condition (summary): 2020 Borrowing Agreements may be activated only after Managing Director notifies Executive Board that the modified FCC is below SOR 100 billion (the "activation threshold"), subject to additional conditions (see Activation & Deactivation).
- Uses while activated:
  - Fund may use resources to fund outright purchases from the GRA during the term.
  - Fund may approve commitments of GRA resources whose purchases could be funded by drawings under this agreement at any time during such commitments, including after expiration of the term, subject to conditions.
  - Resources may be used to fund early repayment of claims under other 2020 Borrowing Agreements if requested by relevant creditors (paragraph 2(e)).
- Drawing objective: achieve over time broadly balanced positions among creditors under all Bilateral Borrowing Agreements relative to commitments.

### Activation and Deactivation (detailed conditions)
- Activation prerequisites before notification:
  - Modified FCC (Decision No. 14906-(11/38), adopted April 20, 2011, taking into account all available uncommitted resources under the NAB) is below SOR 100 billion.
  - NAB is activated at time of notification, or there are no available uncommitted resources under the NAB at that time.
  - Activation approved by creditors representing at least 85 percent of the total credit amount committed under the 2020 Borrowing Agreements by creditors eligible to vote.
- Voting mechanics:
  - Managing Director proposes activation in writing and requests creditors' vote.
  - Creditor ineligible to vote if its 2020 Borrowing Agreement is not effective at vote time or the relevant member is not included in the Fund's Financial Transactions Plan for transfers of its currency.
  - Managing Director may approach creditors before modified FCC is below threshold in extraordinary circumstances.
- Deactivation triggers:
  - Automatic deactivation when NAB is no longer activated, unless no available uncommitted resources under the NAB at that time.
  - Deactivation if Managing Director notified Executive Board that modified FCC (excluding Bilateral Borrowing Agreements) has risen above activation threshold and either:
    - Executive Board determines activation no longer necessary; or
    - Six months have elapsed since notification and modified FCC (excluding Bilateral Borrowing Agreements) has not fallen below activation threshold.
  - If deactivated under this paragraph and modified FCC later falls below activation threshold, paragraph 2(b) provisions apply.

### Drawings, Estimates, and Notices
- Estimates: Prior to each plan period the Fund shall provide SNB best estimates of expected drawings; revised estimates during each period as warranted.
- Exclusions:
  - SNB not included in periodic plan, and no drawings made under this agreement, if Switzerland is not included and not proposed by Managing Director for Financial Transactions Plan transfers.
  - No drawings if at drawing time Switzerland's currency is not used in transfers under the Financial Transactions Plan because of Switzerland's balance of payments and reserve position.
  - If Switzerland subsequently included in Financial Transactions Plan after activation vote, drawings may be made to fund purchases made and commitments approved during activation unless SNB notifies Fund otherwise.
- Notice periods:
  - Standard: at least five business days' (Zurich) notice of intention to draw; payment instructions at least two business days (Fund) prior to value date by rapid authenticated means (e.g., SWIFT).
  - Exceptional circumstances: at least three business days (Zurich) notice if five business days not possible; SNB to make best efforts to meet such a call.

### Evidence of Indebtedness
- Reporting: outstanding drawings included in statements of Switzerland's position in the Fund published monthly.
- Instruments: At SNB request, Fund shall issue non-negotiable instruments evidencing indebtedness.
  - Upon repayment of instrument and accrued interest, instrument returned for cancellation.
  - If partial repayment, old instrument returned and new instrument substituted for remainder with same maturity date.

### Maturity and Repayment Terms
- Standard maturity: each drawing has a maturity date of three months from drawing date.
- Extensions:
  - Fund may elect to extend maturity in additional periods of three months after initial maturity.
  - Extension deemed elected automatically for all drawings unless Fund notifies SNB at least five business days (Fund) before a maturity date that it does not elect to extend.
  - Limits:
    - Maturity for any drawing to fund purchases from the GRA shall not be extended later than the tenth anniversary of the drawing date.
    - Maturity for drawings to fund early repayments of other creditors' claims shall be a single common maturity date equal to the longest remaining maximum maturity of any claim for which early repayment requested or the tenth anniversary of the drawing date, whichever is earlier.
- Repayment mechanics:
  - Fund repays principal on maturity date.
  - Fund may make early repayment in part or full after consultation with SNB, with at least five business days (Fund) prior notice.
  - Repayments restore pro tanto the amount available to be drawn; extension of maturity does not reduce drawable amount.
  - If maturity date not a business day where payment made, payment date is next business day and interest accrues to payment date.

### Rate of Interest and Interest Payments
- Interest rate: each drawing bears interest at the SOR interest rate established by the Fund pursuant to Article XX, Section 3; if Fund pays higher rate on comparable borrowing under Article VII, Section 1(i), interest payable on drawings under this agreement shall be equivalent to that higher rate while it remains in effect.
- Interest calculation and payment:
  - Interest calculated on outstanding amount of the drawing.
  - Interest accrues daily.
  - Interest paid promptly by the Fund 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 of drawings:
  - SNB pays SOR equivalent amount of CHF to the Fund's account at designated depository of Switzerland on the value date specified.
  - For drawings under paragraph 2(e), SNB ensures balances drawn that are not freely usable can be exchanged for a freely usable currency of its choice; for balances in a freely usable currency, SNB shall collaborate to enable exchange for another freely usable currency.
- Repayment currency options (as determined by the Fund, subject to provisions):
  - In the currency borrowed whenever feasible,
  - In CHF,
  - In special drawing rights (subject to Article XIX, Section 4 limit unless Switzerland agrees to accept SDRs above that limit),
  - In freely usable currencies,
  - With SNB agreement, in other currencies included in Fund's Financial Transactions Plan for transfers.
- Interest payments: normally in SDRs; Fund and SNB may agree interest payments be made in CHF.
- Payment accounts:
  - Payments in CHF to account specified by SNB.
  - Payments in SDRs by crediting Switzerland's account in the Special Drawing Rights Department.
  - Payments in any other currency to account specified by SNB.

### Early Repayment at Request of the SNB
- SNB can request early repayment at face value of all or part of outstanding drawings if:
  - (i) SNB represents Switzerland's balance of payments and reserve position justifies repayment, and
  - (ii) Fund, giving that representation the overwhelming benefit of any doubt, determines need for early repayment in light of Switzerland's balance of payments and reserve position.
- Repayments under this paragraph may be made in SDRs or a freely usable currency as determined by the Fund, or with SNB agreement in currencies included in Fund's Financial Transactions Plan for transfers.

### Transferability of Claims and Obligations
- General restriction: SNB may not transfer obligations or claims under this agreement except with prior Fund consent and on Fund-approved terms (subparagraph (a)).
- Permitted transfers (subparagraph (b)):
  - SNB may transfer all or part of any claim to any member, to central bank or other fiscal agency designated by any member for Article V, Section 1 purposes ("other fiscal agency"), or to any official entity prescribed as a holder of SDRs pursuant to Article XVII, Section 3.
- Conditions on transferee (subparagraph (c)):
  - Transferee assumes SNB liability under paragraph 5(a) regarding extension of maturity for transferred claim.
  - Transferred claim held on same terms as by SNB, 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 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 its central bank/other fiscal agency, references to CHF in paragraph 7 deemed to refer to currency of relevant member; 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 (Zurich) deemed to refer to business days where transferee is situated.
- Price and notification:
  - Price of transferred claim as agreed between SNB and transferee.
  - SNB shall notify Fund promptly of claim transferred, transferee name, amount, agreed price, and value date.
  - Transfer reflected in Fund records if in accordance with paragraph 9 terms; effective as of agreed value date.
- Interest payment adjustment:
  - If claim transferred during a quarterly period as described in paragraph 6(b), Fund shall pay interest to transferee on amount transferred for the whole of that period.
- Fund assistance: Fund shall assist in seeking to arrange transfers if requested.

### 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, Section 7(a) of the Fund's Articles of Agreement and Fund rules and regulations for the second business day of the Fund before the value date of the transfer, exchange or payment.

*Loan Agreement between the Swiss National Bank and the International Monetary Fund (Section 1).*

### Section 2

### pr214-signed-switzerland-2020-borrowing-agreements - Section 2

### Exchange rate determination and valuation rules
- If the exchange rate determination date is not a business day in Zurich, such date shall be the last preceding business day of the Fund that is also a business day in Zurich.
- For purposes of applying the limit on drawings as specified in paragraphs 1 (a), 14(c) and 14(e), the CHF value of each SOR-denominated drawing shall be determined and permanently fixed on the value date of the drawing based on the CHF/SOR exchange rate established pursuant to Article XIX, Section 7(a) of the Fund's Articles of Agreement and the rules and regulations of the Fund thereunder for the second business day of the Fund before the value date of the drawing.
- If this exchange rate determination date is not a business day in Zurich, such date shall be the last preceding business day of the Fund that is also a business day in Zurich.

### Changes in method of valuation
- Paragraph 11. Changes in Method of Valuation of SDR:
  - If the Fund changes the method of valuing the SOR, 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. Non-Subordination of Claims:
  - The Fund agrees that it will not take any action that would have the effect of making the SNB'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. Settlement of Questions:
  - Any question arising under this agreement shall be settled by mutual agreement between the SNB and the Fund.

### Transitional arrangements (paragraph 14)
- Paragraph 14. Transitional Arrangements:
  - (a) Regardless of whether this agreement is activated or not, the Fund:
    - (i) subject to paragraph 14(b) below, shall make drawings under this agreement to repay any outstanding claims under the SNB'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 SNB's 2016 Borrowing Agreement or this agreement are outstanding when the increase in the SNB's NAB credit arrangement becomes effective, the SNB 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 SNB 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 SNB and this agreement enter into effect at the same time, the repayment of the SNB's outstanding claims under the SNB's 2016 Borrowing Agreement shall be funded first with calls under the SNB's NAB credit arrangement before drawings are made under this agreement pursuant to paragraph 14(a) above.
  - (c) If following the repayment of outstanding claims under the SNB's 2016 Borrowing Agreement and this agreement as provided in paragraph 14(b) above, the SNB's outstanding claims under these agreements remain in excess of the Rolled Back Loan Amount as calculated pursuant to paragraph 10(b), the Fund shall repay any outstanding claims under the SNB'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 SNB'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 SNS and the Fund, at the time of such drawing, to:
    - (i) exceed the Loan Amount prior to the effectiveness of the increase in the SNB's NAB credit arrangement, or
    - (ii) exceed the Rolled Back Loan Amount upon and after the effectiveness of the increase in the SNB's NAB credit arrangement, as calculated pursuant to paragraph 10(b);
    - 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 SNB's NAB credit arrangement, and the SNB 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 15. Final Provisions:
  - (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 Switzerland provides the concurrence that is required under Article VII, Section 1 (i) of the Fund's Articles of Agreement for Fund borrowing of CHF from the SNB, or on January 1, 2021, whichever is later.

### Signatures and dates
- Signature pages follow.
- For the Swiss National Bank:
  - Chairman of the Governing Board: Fritz Zurbrugg
  - Vice Chairman of the Governing Board: Fritz Zurbrugg (appears twice in the signature block)
- For the International Monetary Fund:
  - Kristalina Georgieva, Managing Director
- Additional signatory listed:
  - Thomas Jordan, Chairman of the Governing Board
- Dates shown:
  - Date entries and signature dates including September 18, 2020.

*Source: pr214-signed-switzerland-2020-borrowing-agreements - Section 2*

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_Source: https://www.imf.org/-/media/files/news/press-release/2021/pr214/pr214-signed-switzerland-2020-borrowing-agreements.pdf_