## ppea2023035-s001 — EXECUTIVE SUMMARY

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### Surveys of National Authorities and IMF Mission Chiefs
- Survey timing and coverage:
  - Surveys run in January-February 2023 and assessed as of end-2022.
  - 101 member responses: coverage by group — 96 percent of AEs, 56 percent of EMs, and 32 percent of LICs.
  - Respondent institutions: central banks 55 percent, ministries of finance or economy 24 percent, joint responses 18 percent; three responses from Executive Directors.
  - 183 IMF mission chiefs responded: coverage by group — 100 percent of AEs, 95 percent of EMs, and 97 percent of LICs.
- Perceived impact on fiscal and external constraints and policy space:
  - Authorities: 91 percent of LICs’ and 45 percent of EMs’ authorities considered they benefited from a relaxation of fiscal constraints.
  - Authorities: 91 percent of LICs’ and 56 percent of EMs’ authorities saw a relaxation of external financing constraints.
  - Mission chiefs: 82 percent of LICs and 56 percent of EMs experienced an increase in policy space.
    - Of these, 68 percent (LICs) and 39 percent (EMs) did so directly.
    - 14 percent (LICs) and 17 percent (EMs) did so through higher external buffers.
  - Only 11 percent of IMF mission chiefs for AEs considered the allocation created (usable) policy space in AEs.
- Inflation, growth, and macroeconomic volatility:
  - Authorities: almost 95 percent of EMs and about 85 percent of LICs indicated the allocation did not create inflationary pressures.
  - Authorities: about 50 percent of EMs and over 75 percent of LICs thought the allocation helped limit macroeconomic volatility.
  - Mission chiefs: allocation contributed somewhat to higher growth, especially in LICs, but not to higher inflation.
- Policy discipline, reforms, and debt restructuring:
  - Mission chiefs on delay of adjustment/reforms:
    - 79 percent of EMs and 57 percent of LICs: allocation did not delay needed macroeconomic adjustment or reform at all.
    - About 8 percent of EMs and 22 percent of LICs: delayed only marginally.
    - 13 percent of EMs and 20 percent of LICs: allocation led to a delay in needed macroeconomic adjustment or reforms.
  - Authorities’ view on policy discipline: 100 percent of EMs and 91 percent of LICs stated the allocation was not negative for policy discipline.
  - Debt restructuring: 93 percent and 92 percent of mission chiefs for EMs and LICs, respectively, considered the allocation did not delay authorities from potentially seeking debt restructurings.
    - Exceptions: seven cases (three EMs and four LICs) where mission chiefs thought the allocation contributed to delay; two mission chiefs judged the allocation strongly delayed seeking debt treatment.
- Fiscal dominance and central bank independence:
  - Mission chiefs: allocation did not exacerbate fiscal dominance in over 90 percent of EMs and 76 percent of LICs.
    - Reported exacerbations in three EMs and nine LICs.
  - Mission chiefs: allocation did not impact central bank independence in 91 percent of EMs and 79 percent of LICs.
    - Adverse impacts reported in four EMs and eight LICs, including disagreements between central bank and finance ministry on SDR use.
- Program vs. non-program countries:
  - Mission chiefs: allocation helped alleviate fiscal and external constraints in about 76 percent and 83 percent of countries with Fund-supported programs, respectively, versus 28 percent and 32 percent of non-program countries.
  - Allocation effects on fiscal space and fiscal deficit:
    - For countries with Fund-supported programs: increased fiscal space in 73 percent and increased fiscal deficit in 34 percent.
    - For non-program countries: increased fiscal space in 28 percent and increased fiscal deficit in 14 percent.
  - Reported purposes of conversions:
    - Non-program countries: dominant use for pandemic responses (vaccine purchases and support to vulnerable households and firms) and public debt operations.
    - Program countries: more diversified uses, including general budget support.
  - Delays in adjustment/reforms by program status:
    - About one quarter of program countries (versus 10 percent of non-program countries) appear to have delayed needed adjustment or reforms, per mission chiefs.

### Functioning of the Voluntary Trading Arrangements (VTA) Market
- VTA market developments since the 2021 allocation:
  - Number of VTA members increased from 32 to 40 (39 SDR participants and one prescribed holder as of end-April 2023).
  - Eight new members finalized new VTAs since the 2021 allocation: Algeria, Brazil, Estonia, Lithuania, Luxembourg, Mauritius, Oman, and Singapore.
  - VTA members provided additional operational flexibilities, including increasing or removing transactional limits and expanding trading currencies in individual VTAs.
  - Addition of Mauritius and Singapore provided further geographical diversification of the VTA market.
- VTA trading capacity as of end-June 2023:
  - Buying capacity of the VTAs stood at about SDR 210 billion.
  - Selling capacity of the VTAs stood at about SDR 163 billion.
  - Reported capacity reflects updated trading ranges provided by VTA members after the 2021 SDR allocation.
  - Absorption of cumulative SDR sales by VTA members was compensated by the additional absorptive capacity provided by new VTA members.
  - Capacity and broad regional representation expected to support continued smooth functioning of the SDR market.
- Designation mechanism for liquidity backstop:
  - Participants in the SDR Department and prescribed holders may convert SDRs freely in transactions by agreement; VTAs are bilateral arrangements supporting liquidity.
  - If transactions by agreement cannot provide exchange into freely usable currencies, the Articles of Agreement provide for a designation mechanism guaranteeing liquidity.
  - The IMF prepares a Designation Plan annually; these plans have not been activated and remained precautionary since 1987.
  - Prescribed holders cannot exchange SDRs in transactions by designation.
- New prescribed holders and implications:
  - Five institutions approved on February 8, 2023 to become prescribed holders: Caribbean Development Bank, Development Bank of Latin America (Corporación Andina de Fomento), European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank.
  - Total number of prescribed holders rose to twenty.
  - A larger number of prescribed holders provides more choices for members to use SDRs and potentially more opportunities for SDR channeling.

### Transparency and Accountability of Domestic Holding Structures and Fiscal Use of SDRs
- Key issue:
  - Because SDRs are typically held by central banks, shifting them to the government for fiscal use has had an impact on attendant transparency and accountability arrangements.
- Analysis scope and data:
  - Analysis focuses on 94 countries subject to ongoing monitoring under the Safeguards Assessment Policy; conclusions cannot be generalized to the entire membership.
  - Primary sources: annual financial statements publicly available from central banks and fiscal authorities; staff used IMF’s SDR Tracker and safeguards assessment database; complemented by surveys and in-depth discussions with authorities.
- Definitions used:
  - Memorandum of Understanding (MoU): legal instrument/loan agreement between central banks and fiscal authorities to govern terms, conditions, and responsibilities for servicing obligations to the IMF.
  - Use of SDRs: any use of the 2021 SDR allocation to boost international reserves, for fiscal purposes, or a combination.
  - Shift in control of SDRs: transfer of ownership/control from original holding agency to fiscally using entity, typically via legal instrument such as an MoU (forms include on-lending, cession-retrocession, or others).
- Findings — Central banks:
  - SDRs held by central banks are typically subject to high degrees of transparency and accountability.
  - 94 percent of the SDR-holding central banks included in this review publish annual financial statements that are independently audited.
  - Audits performed by external audit firms or State Audit Bodies.
  - Over 90 percent follow an appropriate accounting treatment for the SDR holding.
  - Over 80 percent provide transparent SDR-related publication notes.
  - About 8 percent were not explicit on accounting treatment or made errors in initial recording and accounting treatment of SDRs (example: initial central bank recording of both asset and liability followed by legal opinion identifying government ownership requiring derecognition).
- Findings — Government (Ministry of Finance) holdings:
  - In the reviewed sample, number of MoFs holding SDRs was five compared to 78 central banks.
  - Staff faced challenges finding relevant information for MoFs: financial statements sometimes not published, difficult to locate, or not audited by reputable external audit firm or State Audit Body.
  - Shortcomings hinder assurance on records and reflect broader balance sheet reporting challenges by sovereigns.
- Findings — Combined holding structures:
  - Combined structures often pose challenges for reporting on composition of the member’s consolidated SDR position.
  - In several countries, central banks hold older SDR allocation while MoF holds the most recent one.
  - Clear delineation necessary for responsibilities regarding payment of charges to the IMF and management of financial exposure from fiscal use.
- Findings — Fiscal use of SDRs:
  - Over 70 percent of the analyzed countries used their allocated SDRs.
  - Of those that used SDRs, 57 percent used them in the form of fiscal use:
    - exclusively: 36 percent;
    - in combination with use as an international reserve asset: 21 percent.
  - In only 26 cases did central banks transparently provide sufficient information on the modalities of transfers to the MoF.
  - Staff engagement to establish transparent frameworks for fiscal use of SDRs has had limited traction; very few countries have progressed in developing MoF structures to hold SDRs and manage exposure.
  - Staff will continue to help members strengthen fiscal SDR holding structures, fiscal balance sheet reporting, and sound fiscal management of resulting financial flows.

### Statistical Recording and Holding Structures
- Statistical implications and practices:
  - Statistical treatment depends on whether SDRs are recorded on central bank or government balance sheet; guided by domestic legal and institutional frameworks.
  - The 2021 SDR allocation implies an increase in member countries’ reserve assets until used.
  - SDR allocation is generally recorded in the central bank’s balance sheet as an increase of gross international reserves (GIR).
  - When SDRs are converted, impact on GIR, gross and net external debt, and reclassifications depend on institutional arrangements.
- Observed holding structures and examples:
  - Central bank on-lending to government where domestic legal frameworks allow direct lending (examples: WAEMU, Djibouti, CEMAC).
  - Sale of foreign currency where central bank laws do not allow on-lending (example: Mexico).
  - Hybrid arrangements including cession-retrocession and transfer of SDRs to government (examples: Tunisia and Jordan).
- Reporting as of June 2023:
  - Of 173 economies reporting monthly MFS based on IMF SRFs to STA, balance sheets of 146 central bank reporters reflect full or partial SDR allocation.
- Central bank balance sheet accounting example (when allocation is initially in central bank accounts):
  - Asset side: SDR Holdings: + X
  - Liability side: Allocated SDRs: + X
  - GIR: + X
  - Gross external debt: + X
  - Net external debt/NFA: no change

### Transfers to the Government — Modalities and Balance Sheet Implications (Box 7 summary)
- On-lending to the government:
  - No change in central bank’s NFA or NDA when on-lending offsets increase in government deposits; NDA increases as government uses deposits.
  - Many countries prohibit central banks from lending to the government in FC.
  - If on-lent in DC and spent, monetary base will increase depending on cash/deposit ratio.
  - Central bank Balance Sheet Example 2 highlights Loans to Government + X and Deposits Liabilities of Government + X.
- Exchange of SDRs for Foreign Currency then sold to Government:
  - Central bank records a composition change from SDR to FC; when government uses FC, central bank GIR decreases and NFA decreases while NDA increases.
  - Central bank Balance Sheet Example 3: SDR Holdings -X; Foreign Currency +X; Deposits Liabilities to Government in DC -X; in FC +X.
- Transfer of SDRs (ownership transfer):
  - Derecognition on central bank balance sheet and recognition on central government balance sheet; GIR no change; gross/net external debt no change (reclassification).
  - Central bank Balance Sheet Example 4: SDR Holdings - X; Allocated SDRs - X.
- Cession-Retrocession of SDRs:
  - Central bank sells SDRs to government with government assuming underlying liability while keeping deposits at central bank; allocated SDRs reduced and government deposits increased.
  - Recording depends on government spending type: FC spending decreases NFA / DC spending increases NDA and monetary base.
  - Central bank Balance Sheet Example 5: Allocated SDRs - X; Deposit Liabilities to Government in FC +X; GIR no change.
- Recording SDRs when allocation is initially in government accounts:
  - Government Balance Sheet Example 1: SDR Holdings + X; Allocated SDRs + X; GIR + X; Gross government/external debt + X; Net government/external debt: no change.
  - Using SDR holdings for expenditure (Government Example 2): SDR Holdings - X; Currency and deposits + X - Y; Allocated SDRs: no change; Impacts: GIR -X + remaining proceeds kept as foreign exchange reserves; Gross government/external debt: no change; Net government debt: + Y; Net external debt: +Y (if paid externally) / no change (if paid domestically).
  - Proceeds can be used to reduce other government external debt liabilities (Government Example 3): SDR Holdings - X; Currency and deposits + X - Y; Other External Debt Liabilities - Y; Impacts: GIR -Y; Gross government/external debt -Y; Net government/external debt: no change.

### The Case of Currency Unions
- Practices observed:
  - Regional central banks in Sub-Saharan Africa provided local currency loans in proportion to SDR allocation, serviced by currency union members making interest payments to the regional central bank.
  - Loans are not on-lending of SDR holdings and tend to be classified as domestic debt from member perspective.
  - Some currency union members converted SDR holdings to freely usable currencies, potentially creating a currency union-wide net liability to the SDR Department.
- Risks and considerations:
  - Higher SDR interest rates may create challenges for financial autonomy of regional central banks when (i) regional central banks have SDR holdings below their members’ combined allocation and (ii) higher SDR interest rates are not reflected in repayment terms of members.
  - Regional central banks could face interest rate risk if repayment terms do not compensate for net interest obligations to the SDR Department.
- CEMAC practice:
  - BEAC holds members’ SDRs as an asset and their SDR allocation as a liability.
  - If a member “utilizes” SDRs, BEAC makes available an equivalent amount in domestic currency; member assumes responsibility for charges.
  - A “provision” is deducted to cover first 5 years of SDR charges using a “historical estimate” of the SDR interest rate re-estimated every 5 years.
- WAEMU practice:
  - BCEAO lent upon request to members an amount in CFA Francs equivalent to the SDR allocation; loans governed by MoUs with 20-year maturity (option to rollover) at fixed interest rate of 0.05 percent.
  - WAEMU’s 2023 Staff Report: recent SDR sales have brought the net SDR position of the region to close to zero.

### Status of IMF Fundraising Efforts (selected findings)
- Overall:
  - Significant progress with voluntary SDR channeling since allocation, although more efforts are needed.
  - Pledges toward IMF fundraising for the PRGT and RST, much in SDRs, have been instrumental in supporting lending to vulnerable countries.
- Table 1. Status of Pledges for PRGT Loan Resources (in SDR millions, as of end-June, 2023) — selected entries and totals:
  - Australia: Pledged 500; Status Effective; Media SDR; 2021 SDR Allocation 6,299; Pledge relative to Allocation 8%
  - Belgium: Pledged 250; Media SDR; 2021 SDR Allocation 6,144; Pledge relative to Allocation 4%
  - Canada: Pledged 500; Status Effective; Media SDR; 2021 SDR Allocation 10,566; Pledge relative to Allocation 5%
  - China: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 29,216; Pledge relative to Allocation 3%
  - Denmark: Pledged 150; Status TBD; Media SDR; 2021 SDR Allocation 3,297; Pledge relative to Allocation 5%
  - Finland: Pledged 300; Status Effective; Media SDR; 2021 SDR Allocation 2,310; Pledge relative to Allocation 13%
  - France: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 19,318; Pledge relative to Allocation 5%
  - Italy: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 14,444; Pledge relative to Allocation 7%
  - Japan: Pledged 1,000; Status Effective; Media SDR, USD, other; 2021 SDR Allocation 29,540; Pledge relative to Allocation 3%
  - Korea: Pledged 450; Status TBD; Media SDR; 2021 SDR Allocation 8,226; Pledge relative to Allocation 5%
  - Netherlands: Pledged 500; Status Effective; Media SDR/EUR; 2021 SDR Allocation 8,374; Pledge relative to Allocation 6%
  - Norway: Pledged 150; Status Effective; Media USD; 2021 SDR Allocation 3,599; Pledge relative to Allocation 4%
  - Saudi Arabia: Pledged 2,800; Status Effective; Media SDR; 2021 SDR Allocation 9,577; Pledge relative to Allocation 29%
  - Spain: Pledged 350; Status Effective; Media SDR; 2021 SDR Allocation 9,139; Pledge relative to Allocation 4%
  - Sweden: Pledged 150; Status Effective; Media SDR; 2021 SDR Allocation 4,246; Pledge relative to Allocation 4%
  - United Kingdom: Pledged 1,500; Status Effective; Media SDR; 2021 SDR Allocation 19,318; Pledge relative to Allocation 8%
  - Total pledged: 11,600
  - Target Amount: 12,600
  - Memorandum items:
    - Share of pledges/loan agreements in SDRs: Pledges under the 2021 (ongoing) fundraising round 94%
    - Effected loan agreements under the 2020 fundraising round 63%
  - Note: Some pledged amounts are subject to completion of domestic procedures.
  - Note: The loan resources have been provided at a concessional rate and are estimated will generate about SDR 250 million in implicit subsidies, subject to SDR interest rate assumptions.
- Table 2. Status of PRGT Fundraising—Subsidy Contributions (as of end-June, 2023) — selected entries and totals:
  - Australia: Received 36; 2021 SDR Allocation (SDR mln) 6,299; Media Investment in pooled assets SRA SDR; concessional loan pledge relative to Allocation 0.6%
  - Canada: Received 61; Media Grant SRA CAD 60
  - China: Received 168; Media Investment in DIA SRA SDR 168; 2021 SDR Allocation 29,216; concessional loan pledge relative to Allocation 0.6%
  - France: Received 111; Media Grant SRA EUR 1063 2 (as presented)
  - Germany: Received 146; Media Grant GSA EUR 828
  - Japan: Received 169; Media Grant and Investment in DIA GSA+SRA US$1719; 2021 SDR Allocation 29,540; concessional loan pledge relative to Allocation 0.6%
  - Netherlands: Received 48; Media Grant GSA EUR 2323
  - United Kingdom: Received 111; Media Concessional loan SDR 250; Status Effective; 2021 SDR Allocation 19,318; concessional loan pledge relative to Allocation 1.3%
  - United States: Received 456; Media Grant SRA US$55
  - European Commission: Received -; Media Grant GSA, ECS, SCS EUR 7878
  - Total Received: 1,380; Total Grant 763; Total Implicit Subsidy 250-; Total Investment and Deposit 294-; To be Determined (TBD) 73-; Target Amount 2,300; Number of asks 61
  - Notes:
    - Total proposed amount covering the 61 asks equals SDR 2.3 billion in NPV terms as of end-2020.
    - Several pledged amounts are subject to completion of domestic procedures.
    - The loan resources have been provided at a concessional rate and are estimated will generate about SDR 250 million in implicit subsidies, subject to SDR interest rate assumptions.
- Table 3. Status of RST Funding (In SDR billions, as of end-June, 2023) — selected entries and totals:
  - Australia: RST contribution 0.9; 2021 SDR allocation 6.3; Contribution as share of 2021 SDR allocation 15%
  - Belgium: 0.7; 6.1; 11%
  - Canada: 1.4; 10.6; 13%
  - China: 6.0; 29.2; 21%
  - France: 3.1; 19.3; 16%
  - Italy: 1.9; 14.4; 13%
  - Japan: 5.0; 29.5; 17%
  - Korea: 0.9; 8.2; 11%
  - Lithuania: 0.08; 0.4; 20%
  - Luxembourg: 0.25; 3.1; 20%
  - Malta: 0.02; 0.2; 14%
  - Netherlands: 1.2; 8.4; 15%
  - Oman: 0.03; 0.03; 0.57%
  - Singapore: 0.7; 3.7; 20%
  - Spain: 1.4; 9.1; 16%
  - United Kingdom: 2.5; 19.3; 13%
  - Subtotal: 26.1; 15%
  - Standalone contributions:
    - Estonia: 0.025; 0.2; 11%
    - Germany: 5.1; 25.5; 20%
  - Grand total: 31.2; 15%
  - Notes:
    - The table reports amounts pledged or contributed; pledges may exclude reserve account contribution; some pledges subject to domestic procedures.
    - Fundraising target of SDR 33 billion was set for contribution packages to all three RST accounts.
    - A 'standalone contribution' refers to contributions to the deposit and/or reserve accounts, normally with a maturity of 10 years.

*Excerpt from ppea2023035-s001 — 2021 SPECIAL DRAWING RIGHTS ALLOCATION—EX-POST ASSESSMENT REPORT—BACKGROUND PAPERS*

### EXECUTIVE SUMMARY

### ppea2023035-s001 - EXECUTIVE SUMMARY

### Surveys of National Authorities and IMF Mission Chiefs
- Survey timing and coverage:
  - Surveys run in January-February 2023 and assessed as of end-2022.
  - 101 member responses: coverage by group — 96 percent of AEs, 56 percent of EMs, and 32 percent of LICs.
  - Respondent institutions: central banks 55 percent, ministries of finance or economy 24 percent, joint responses 18 percent; three responses from Executive Directors.
  - 183 IMF mission chiefs responded: coverage by group — 100 percent of AEs, 95 percent of EMs, and 97 percent of LICs.
- Perceived impact on fiscal and external constraints and policy space:
  - Authorities: 91 percent of LICs’ and 45 percent of EMs’ authorities considered they benefited from a relaxation of fiscal constraints.
  - Authorities: 91 percent of LICs’ and 56 percent of EMs’ authorities saw a relaxation of external financing constraints.
  - Mission chiefs: 82 percent of LICs and 56 percent of EMs experienced an increase in policy space.
    - Of these, 68 percent (LICs) and 39 percent (EMs) did so directly.
    - 14 percent (LICs) and 17 percent (EMs) did so through higher external buffers.
  - Only 11 percent of IMF mission chiefs for AEs considered the allocation created (usable) policy space in AEs.
- Inflation, growth, and macroeconomic volatility:
  - Authorities: almost 95 percent of EMs and about 85 percent of LICs indicated the allocation did not create inflationary pressures.
  - Authorities: about 50 percent of EMs and over 75 percent of LICs thought the allocation helped limit macroeconomic volatility.
  - Mission chiefs: allocation contributed somewhat to higher growth, especially in LICs, but not to higher inflation.
- Policy discipline, reforms, and debt restructuring:
  - Mission chiefs on delay of adjustment/reforms:
    - 79 percent of EMs and 57 percent of LICs: allocation did not delay needed macroeconomic adjustment or reform at all.
    - About 8 percent of EMs and 22 percent of LICs: delayed only marginally.
    - 13 percent of EMs and 20 percent of LICs: allocation led to a delay in needed macroeconomic adjustment or reforms.
  - Authorities’ view on policy discipline: 100 percent of EMs and 91 percent of LICs stated the allocation was not negative for policy discipline.
  - Debt restructuring: 93 percent and 92 percent of mission chiefs for EMs and LICs, respectively, considered the allocation did not delay authorities from potentially seeking debt restructurings.
    - Exceptions: seven cases (three EMs and four LICs) where mission chiefs thought the allocation contributed to delay; two mission chiefs judged the allocation strongly delayed seeking debt treatment.
- Fiscal dominance and central bank independence:
  - Mission chiefs: allocation did not exacerbate fiscal dominance in over 90 percent of EMs and 76 percent of LICs.
    - Reported exacerbations in three EMs and nine LICs.
  - Mission chiefs: allocation did not impact central bank independence in 91 percent of EMs and 79 percent of LICs.
    - Adverse impacts reported in four EMs and eight LICs, including disagreements between central bank and finance ministry on SDR use.
- Program vs. non-program countries:
  - Mission chiefs: allocation helped alleviate fiscal and external constraints in about 76 percent and 83 percent of countries with Fund-supported programs, respectively, versus 28 percent and 32 percent of non-program countries.
  - Allocation effects on fiscal space and fiscal deficit:
    - For countries with Fund-supported programs: increased fiscal space in 73 percent and increased fiscal deficit in 34 percent.
    - For non-program countries: increased fiscal space in 28 percent and increased fiscal deficit in 14 percent.
  - Reported purposes of conversions:
    - Non-program countries: dominant use for pandemic responses (vaccine purchases and support to vulnerable households and firms) and public debt operations.
    - Program countries: more diversified uses, including general budget support.
  - Delays in adjustment/reforms by program status:
    - About one quarter of program countries (versus 10 percent of non-program countries) appear to have delayed needed adjustment or reforms, per mission chiefs.

### Functioning of the Voluntary Trading Arrangements (VTA) Market
- VTA market developments since the 2021 allocation:
  - Number of VTA members increased from 32 to 40.
  - VTA members provided significant additional operational flexibility.
  - VTA trading capacity remained strong and sufficient to absorb demand for SDR conversions arising from the 2021 allocation.
  - Availability of information on SDR operations expanded, including publication of an Annual Update on SDR Trading Operations and additional data on SDR holdings, transactions, and trading.

### Transparency and Accountability of Domestic Holding Structures and Fiscal Use of SDRs
- Key issue:
  - Because SDRs are typically held by central banks, shifting them to the government for fiscal use has had an impact on attendant transparency and accountability arrangements.
- Observations (summary of topics covered in the section):
  - Modalities of domestic SDR holding structures vary and affect transparency and accountability.
  - Fiscal use of SDRs can change publication, accounting, and oversight practices compared to central bank holdings.
  - Transfers or reclassifications between central bank and government holdings posed transparency challenges in some cases, contributing to tensions between ministries of finance and central banks.

### Statistical Recording
- Topics addressed:
  - Statistical impact of the allocation on members’ international reserves.
  - Implications of reclassifications of SDR positions between the central bank and the government.
  - Specific modalities of SDR use in regional currency unions, informed by experience in CEMAC and WAEMU.
- Structure:
  - Coverage includes various holding structures, recording when allocation is initially in central bank accounts, recording when initially in government accounts, and the case of currency unions.

### Status of Fundraising Efforts
- Fundraising topics:
  - Description of fundraising efforts for the Poverty Reduction and Growth Trust (PRGT) and Resilience and Sustainability Trust (RST).
  - Tables in the report cover status of pledges for PRGT loan resources, status of PRGT fundraising—subsidy contributions, and status of RST funding.

*Background paper prepared by the Strategy, Policy and Review (SPR) and Finance (FIN) Departments in collaboration with the Statistics Department; approved August 7, 2023.*

### 8. Participants in the SDR Department and prescribed holders may convert SDRs freely,

### 8. Participants in the SDR Department and prescribed holders may convert SDRs freely, 

### VTA market and SDR convertibility
- Participants in the SDR Department and prescribed holders may convert SDRs freely, without the requirement of representing a balance of payments need, to obtain an equivalent amount of currency in a transaction by agreement with another participant or prescribed holder.
- VTAs are bilateral arrangements between the Fund and SDR participants or prescribed holders, under which the VTA members agree to buy and sell SDRs within certain limits.
- For over three decades, most SDR transactions have been arranged through the VTA market with a few transactions agreed bilaterally between participants and/or prescribed holders in the SDR Department.
- These VTAs, with a broad regional distribution, support the liquidity of the SDR.

### Expansion and strengthening of the VTA market since the 2021 allocation
- Eight new members finalized new VTAs since the 2021 allocation: Algeria, Brazil, Estonia, Lithuania, Luxembourg, Mauritius, Oman, and Singapore (Figure 8).
- Number of VTA members increased from 32 to 40 (39 SDR participants and one prescribed holder as of end-April 2023).
- Addition of Mauritius and Singapore provided further geographical diversification of the VTA market.
- Many VTA members provided additional operational flexibilities, including:
  - increasing or removing transactional limits;
  - expanding trading currencies in individual VTAs.

### New prescribed holders and implications
- In February 2023, the Executive Board approved the applications of five institutions to become prescribed holders, bringing the total number of prescribed holders to twenty (IMF 2023).
- The five institutions approved on February 8, 2023 were: the Caribbean Development Bank, the Development Bank of Latin America (known as Corporación Andina de Fomento), the European Bank for Reconstruction and Development, the European Investment Bank, and the Inter-American Development Bank.
- A larger number of prescribed holders will provide more choices for members to use the SDRs and potentially create more opportunities for SDR channeling.

### VTA trading capacity as of end-June 2023
- Trading capacity of the VTAs is determined by comparing the minimum and maximum SDR amounts that VTA members are willing to hold with their actual SDR holdings.
- As of end-June 2023:
  - buying capacity of the VTAs stood at about SDR 210 billion;
  - selling capacity of the VTAs stood at about SDR 163 billion.
- The reported capacity reflects updated trading ranges provided by VTA members after the 2021 SDR allocation.
- Absorption of cumulative SDR sales by VTA members, which decreases total absorptive capacity, was compensated by the additional absorptive capacity provided by new VTA members.
- This capacity, together with broad regional representation of the VTAs, is expected to support the continued smooth functioning of the SDR market.

### Designation mechanism for liquidity backstop
- If transactions by agreement (through VTAs or bilaterally) cannot provide exchange of SDRs into freely usable currencies, the Articles of Agreement provide for a designation mechanism that guarantees the liquidity of the SDR market.
- The designation mechanism ensures that, in case of balance of payments need, participants can use SDRs to obtain freely usable currencies at short notice.
- The IMF prepares a Designation Plan annually, which can be activated in such an event.
- These plans have not been activated and remained precautionary since 1987.
- Prescribed holders cannot exchange SDRs in transactions by designation.

### Transparency and accountability of members' holdings and fiscal use of SDRs — overview
- Transparency and accountability of SDR use depends on how SDRs are held domestically; shifting SDRs to the fiscal authority (i.e., Ministry of Finance) to facilitate fiscal use has impacted transparency and accountability arrangements.
- Analysis in this section focuses on 94 countries subject to ongoing monitoring under the Safeguards Assessment Policy; these countries are a broadly representative sample of members that have used, or are likely to use, their SDRs, but conclusions cannot be generalized to the entire membership.
- Some country information was not readily available due to domestic challenges (e.g., ongoing war and/or political instability).

### Definitions used in analysis
- Memorandum of Understanding (MoU): a legal instrument/loan agreement between central banks and fiscal authorities established to govern the respective terms, conditions, and responsibilities for servicing obligations (i.e., payment of charges, repayment of SDRs upon reconstitution) to the IMF.
- Use of SDRs: refers to any such use of the 2021 SDR allocation, e.g., to boost international reserves at central banks, for fiscal purposes (i.e., debt repayment, fiscal outlays, external financing needs, or to clear arrears), or a combination of both.
- Shift in control of SDRs: refers to the transfer of ownership/control of the allocated SDR from the original holding agency to the entity fiscally using the SDRs, typically done through a legal instrument such as an MoU. This shift may take several forms (on-lending to the State of foreign exchange in which the SDRs were converted, cession-retrocession operations, or others depending on the legal framework of each country).

### Methodology and data sources for staff analysis
- Primary sources: annual financial statements publicly available from central banks and fiscal authorities (typically the MoF).
- Staff applied judgment in assessing quality of SDR-related accounting treatment and publication in financial statements, as well as controls and modalities/instruments underpinning shifts in control of SDRs.
- Analysis was complemented by responses to surveys of country authorities and mission chiefs.
- Staff used information from the IMF’s SDR Tracker to compare and corroborate information recorded in the safeguards assessment database.
- Staff engaged in in-depth discussions with country authorities and provided advice on modalities of fiscal use of SDRs.

### Findings — Central banks
- SDRs held by central banks are typically subject to high degrees of transparency and accountability.
- Almost all (94 percent) of the SDR-holding central banks included in this review publish annual financial statements that are independently audited.
- Audits are performed by external audit firms or State Audit Bodies.
- Over 90 percent of the SDR-holding central banks that publish financial statements follow an appropriate accounting treatment for the SDR holding.
- Over 80 percent of the SDR-holding central banks that publish annual financial statements provide transparent SDR-related publication notes.
- About 8 percent of central banks were not specific (explicit) on the accounting treatment of the SDR holding or made errors in initial recording and accounting treatment of SDRs.
  - Example: one member initially recorded both the asset (holdings) and the liability (allocation) on the central bank balance sheet, with monetization channeled through on-lending from the central bank to the government’s accounts, reflecting a corresponding receivable as a claim on the government. A subsequent legal opinion identified the government as the owner of the SDR allocation, requiring derecognition of both assets and liability from the central bank’s balance sheet.

### Findings — Government (Ministry of Finance) holdings
- In the reviewed sample, number of MoFs holding SDRs was five compared to 78 central banks.
- Staff faced challenges finding relevant information for MoFs because financial statements are sometimes:
  - not published;
  - difficult to locate on external websites (particularly when in a different language);
  - not audited by a reputable external audit firm or the State Audit Body.
- These shortcomings hinder assurance on the records and must be considered against broader challenges of balance sheet financial reporting by sovereigns.

### Findings — Combined holding structures (central bank and MoF)
- Combined holding structures often pose challenges for reporting on composition of the member’s consolidated SDR position.
- In several countries, central banks hold the older SDR allocation, whereas the MoF holds the most recent one.
- Challenge: providing a clear view on respective portions of central bank and MoF in the asset (SDR holding) and liability (SDR allocation) relative to the member’s total position vis-à-vis the IMF (SDR Department).
- Clear delineation is necessary for delineating responsibilities regarding payment of charges to the IMF and for MoF management of financial exposure from fiscal use of SDRs.

### Findings — Fiscal use of SDRs
- Over 70 percent of the analyzed countries used their allocated SDRs.
- Of those that used SDRs, 57 percent used them in the form of fiscal use, either:
  - exclusively: 36 percent;
  - in combination with use of SDRs as an international reserve asset: 21 percent.
- In some instances fiscally used SDRs were held at the outset by the government through the MoF, but in many instances SDRs were originally held by central banks and needed to be transferred to the MoF to facilitate fiscal use.
- In only 26 cases did central banks transparently provide sufficient information on the modalities of such a transfer.
- Staff has engaged with member authorities on establishing transparent frameworks for fiscal use of SDRs, but traction has been limited. Very few countries have made progress in developing MoF structures to hold SDRs and manage exposure stemming from fiscal use.
- Staff will continue to help members strengthen fiscal SDR holding structures and fiscal balance sheet reporting and sound fiscal management of resulting financial flows.

### Statistical recording and holding structures
- Statistical treatment of SDRs depends on whether SDRs are recorded on the central bank or government balance sheet, guided by domestic legal and institutional frameworks.
- The 2021 SDR allocation implies an increase in member countries’ reserve assets until it is used.
- The SDR allocation is generally recorded in the central bank’s balance sheet as an increase of gross international reserves (GIR).
- When SDRs are converted, impact on GIR, gross and net external debt, and reclassifications of SDR positions between central bank and government depend on institutional arrangements.
- Holding structures observed:
  - Central bank on-lending to government where domestic legal frameworks allow direct lending (e.g., WAEMU, Djibouti, CEMAC examples).
  - Sale of foreign currency where central bank laws do not allow on-lending (e.g., Mexico example).
  - Hybrid arrangements including cession-retrocession and transfer of SDRs to government (examples: Tunisia and Jordan).
- As of June 2023:
  - Of 173 economies reporting monthly MFS based on IMF SRFs to STA, balance sheets of 146 central bank reporters reflect full or partial SDR allocation.

### Central bank balance sheet accounting example (when allocation is initially in central bank accounts)
- When central bank receives SDRs:
  - Asset side: SDR Holdings: + X
  - Liability side: Allocated SDRs: + X
  - GIR: + X
  - Gross external debt: + X
  - Net external debt/NFA: no change

*Source: Excerpt from ppea2023035-s001 — 2021 SPECIAL DRAWING RIGHTS ALLOCATION—EX-POST ASSESSMENT REPORT—BACKGROUND PAPERS*

### 29. Transfers to the government could then take various forms (Box 7 in the main paper):

### 29. Transfers to the government could then take various forms (Box 7 in the main paper)

### On-lending to the government
- Description:
  - On-lending, in either FC or DC, implies no change in the central bank’s net claims on the central government as an increase in the government deposit liabilities offsets the increase in the claims on the central government, resulting in no change in either the central bank’s NFA or the net domestic assets (NDA).
  - As the government uses the deposits at the central bank, the central bank’s NDA will increase reflecting the increase in net claims on the central government.
  - If the government would use FC directly from its FC deposits or obtain FC from the central bank using its DC deposits, the central bank’s NFA would decrease as GIR decrease.
  - Many countries prohibit central banks from lending to the government in FC.
  - If, motivated or backed by SDRs received, the central bank on-lends to the government in DC, the monetary base will increase depending on the type of the spending and the cash/deposit ratio of the economy—partly increasing currency in circulation and partly fueling deposits in the monetary base.
- Central Bank’s Balance Sheet Example 2 (as presented):
  - Assets
    - Official Foreign Reserves
      - SDR Holdings: no change
    - Domestic Assets:
      - Loans to Government (in DC or FC): + X
    - Foreign Liabilities
      - Allocated SDRs: no change
  - Liabilities and Equity
    - Domestic Liabilities
      - Deposits Liabilities of Government (in DC or FC): +X
      - GIR: decrease if foreign exchange reserves are used
      - Gross external debt / net external debt / NFA: no change

### Exchange of SDRs for Foreign Currency that is then sold to the Government
- Description:
  - Central bank records a change in composition of its foreign assets/reserves and a switch from DC to FC in government deposits on the liabilities side.
  - Initially, net claims on the government do not change, but when the government starts using the FC, foreign assets/reserves of the central bank will decrease with an equivalent decrease in government FC deposits, resulting in a decrease in NFA and an increase in NDA.
  - Same outcome occurs when the government uses its DC deposit balances to buy FC from the central bank and to use it.
- Central Bank’s Balance Sheet Example 3 (as presented):
  - Assets
    - Official Foreign Reserves
      - SDR Holdings: -X
      - Foreign Currency: +X
    - Foreign Liabilities
      - Allocated SDRs: no change
  - Liabilities and Equity
    - Domestic Liabilities
      - Deposits Liabilities to the Government in DC: -X
      - Deposit Liabilities to the Government in FC: +X
      - GIR: decrease if foreign exchange reserves are used
      - Gross external debt / net external debt / NFA: no change

### Transfer of SDRs
- Description:
  - Central bank transfers ownership of part or all SDR holdings/allocation to the central government in accordance with domestic legislation.
  - Leads to derecognition of assets (SDR holdings) and liabilities (SDR allocation) on the central bank’s balance sheet and recognition of the same on the central government’s balance sheet.
- Central Bank’s Balance Sheet Example 4 (as presented):
  - Assets
    - Official Foreign Reserves:
      - SDR Holdings: - X
  - Foreign Liabilities
    - Allocated SDRs: - X
  - Impacts
    - GIR: no change (just reclassification from central bank to government)
    - Gross /net external debt: no change (just reclassification from central bank to government)

### Cession-Retrocession of SDRs
- Description:
  - Central bank sells the SDRs to the central government against the consideration that the central government assumes the underlying liability, while keeping the government’s SDR holdings as deposits in the central bank.
  - SDR allocation reduced in the central bank’s balance sheet and deposits of the government on the liability side increased.
  - Implies a decrease in foreign liabilities and an increase in domestic liabilities of the central bank.
  - Further recording depends on the type of the central government spending:
    - If government spending is in FC, the NFA will decrease with an equivalent increase in the central bank’s NDA.
    - If the government exchanges its FC deposits into DC and spends locally, the NDA and monetary base will increase as in the on-lending scenario.
- Central Bank’s Balance Sheet Example 5 (as presented):
  - Assets
    - Official Foreign Reserves:
      - SDR Holdings: No change
    - Foreign Liabilities
      - Allocated SDRs: - X
  - Domestic Liabilities
    - Deposit Liabilities to the Government in FC: +X
  - Impacts
    - GIR: no change
    - Gross/net external debt: no change (just reclassification from central bank to government)

### Recording SDRs when the Allocation Is Initially in Government Accounts
- When government receives SDRs per domestic arrangement:
  - An increase in SDR holdings recorded on the asset side of the government’s balance sheet, together with an equal increase on the liabilities side in SDR allocation.
  - The SDR allocation is part of the long-term external liabilities of the government and is part of gross government debt.
- Government’s Balance Sheet Example 1 (as presented):
  - Assets
    - External
      - SDR Holdings: + X
  - Liabilities
    - External
      - Allocated SDRs: +X
  - Impacts
    - GIR: +X
    - Gross government/external debt: +X
    - Net government/external debt: no change

- Using SDR holdings (government first exchanges SDR holdings for DC or FC):
  - Proceeds may be used to finance government expenditure (nonfinancial assets, purchase of goods and services, compensation of employees, transfers).
  - Cumulative SDR allocation is unaffected, so gross government debt remains unchanged as a result of the allocation.
- Government’s Balance Sheet Example 2 (as presented):
  - Expenditure + Y
  - Assets
    - External
      - SDR Holdings: - X
    - External or Domestic
      - Currency and deposits (C&D): + X - Y
  - Liabilities
    - External
      - Allocated SDRs: no change
  - Impacts
    - GIR: -X + remaining proceeds kept as foreign exchange reserves
    - Gross government/external debt: no change
    - Net government debt: + Y
    - Net external debt: +Y (if paid externally) / no change (if paid domestically)

- Proceeds can also be used to reduce other government external debt liabilities.
- Government’s Balance Sheet Example 3 (as presented):
  - Expenditure No change
  - Assets
    - External
      - SDR Holdings: - X
      - Currency and deposits: + X - Y
  - Liabilities
    - External
      - Allocated SDRs: no change
      - Other External Debt Liabilities: - Y
  - Impacts
    - GIR: -Y
    - Gross government/external debt: -Y
    - Net government/external debt: no change

### The Case of Currency Unions
- Specific attention needed for SDR allocation use in regional currency unions.
- Practices observed:
  - Regional central banks in Sub-Saharan Africa provided local currency loans (monetary financing) in proportion to the SDR allocation received by member countries, serviced by currency union members that make interest payments to the regional central bank at agreed terms.
  - These loans are not per se financially linked to the SDRs—there is no “on-lending” of SDR holdings—and tend to be classified as domestic debt from the view of the member.
  - Some currency union members converted SDR holdings to freely usable currencies, potentially creating a currency union-wide net liability to the SDR Department that would need to be serviced.
- Risks and considerations:
  - Higher SDR interest rates may create challenges for financial autonomy of regional central banks when (i) regional central banks have SDR holdings below their members’ combined allocation and (ii) higher SDR interest rates are not reflected in repayment terms of members. Regional central banks could face interest rate risk if repayment terms do not compensate for net interest obligations to the SDR Department.
- CEMAC (Central African Economic and Monetary Community) practice:
  - BEAC holds members’ SDRs as an asset and their SDR allocation as a liability.
  - If a member “utilizes” SDRs for domestic financing, BEAC makes available an equivalent amount in domestic currency to that member state—an exception to CEMAC’s general monetary financing prohibition.
  - Member assumes responsibility for charges: the domestic currency amount is transferred after separate deduction of a “provision” aiming to cover the first 5 years of SDR charges, using a “historical estimate” of the SDR interest rate over a 5-year period that is re-estimated every 5 years.
- WAEMU practice:
  - BCEAO lent upon request to members an amount in CFA Francs equivalent to the SDR allocation; considered an exception to prohibition of monetary financing.
  - Loans governed by MoUs: 20-year maturity (with the option of rollover) at a fixed interest rate of 0.05 percent.
  - Per WAEMU’s 2023 Staff Report on Common Policies for Member Countries, recent SDR sales have brought the net SDR position of the region to close to zero.

### Status of IMF Fundraising Efforts (selected tabulated findings as presented)
- Progress summary:
  - Significant progress with voluntary SDR channeling since allocation, although more efforts are needed.
  - Pledges toward IMF fundraising for the PRGT and RST, much in SDRs, have been instrumental in supporting lending to vulnerable countries.
- Table 1. Status of Pledges for PRGT Loan Resources (in SDR millions, as of end-June, 2023) — selected entries
  - Australia: Pledged 500; Status Effective; Media SDR; 2021 SDR Allocation 6,299; Pledge relative to Allocation 8%
  - Belgium: Pledged 250; Media SDR; 2021 SDR Allocation 6,144; Pledge relative to Allocation 4%
  - Canada: Pledged 500; Status Effective; Media SDR; 2021 SDR Allocation 10,566; Pledge relative to Allocation 5%
  - China: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 29,216; Pledge relative to Allocation 3%
  - Denmark: Pledged 150; Status TBD; Media SDR; 2021 SDR Allocation 3,297; Pledge relative to Allocation 5%
  - Finland: Pledged 300; Status Effective; Media SDR; 2021 SDR Allocation 2,310; Pledge relative to Allocation 13%
  - France: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 19,318; Pledge relative to Allocation 5%
  - Italy: Pledged 1,000; Status Effective; Media SDR; 2021 SDR Allocation 14,444; Pledge relative to Allocation 7%
  - Japan: Pledged 1,000; Status Effective; Media SDR, USD, other; 2021 SDR Allocation 29,540; Pledge relative to Allocation 3%
  - Korea: Pledged 450; Status TBD; Media SDR; 2021 SDR Allocation 8,226; Pledge relative to Allocation 5%
  - Netherlands: Pledged 500; Status Effective; Media SDR/EUR; 2021 SDR Allocation 8,374; Pledge relative to Allocation 6%
  - Norway: Pledged 150; Status Effective; Media USD; 2021 SDR Allocation 3,599; Pledge relative to Allocation 4%
  - Saudi Arabia: Pledged 2,800; Status Effective; Media SDR; 2021 SDR Allocation 9,577; Pledge relative to Allocation 29%
  - Spain: Pledged 350; Status Effective; Media SDR; 2021 SDR Allocation 9,139; Pledge relative to Allocation 4%
  - Sweden: Pledged 150; Status Effective; Media SDR; 2021 SDR Allocation 4,246; Pledge relative to Allocation 4%
  - United Kingdom: Pledged 1,500; Status Effective; Media SDR; 2021 SDR Allocation 19,318; Pledge relative to Allocation 8%
  - Total pledged: 11,600
  - Target Amount: 12,600
  - Memorandum items:
    - Share of pledges/loan agreements in SDRs:
      - Pledges under the 2021 (ongoing) fundraising round 94%
      - Effected loan agreements under the 2020 fundraising round 63%
  - Note: Some pledged amounts are subject to completion of domestic procedures.
  - Note: The loan resources have been provided at a concessional rate and are estimated will generate about SDR 250 million in implicit subsidies, subject to SDR interest rate assumptions.
- Table 2. Status of PRGT Fundraising—Subsidy Contributions (as of end-June, 2023) — selected entries
  - Australia: Received 36; 2021 SDR Allocation (SDR mln) 6,299; Media Investment in pooled assets SRA SDR; concessional loan pledge relative to Allocation 0.6%
  - Canada: Received 61; Media Grant SRA CAD 60
  - China: Received 168; Media Investment in DIA SRA SDR 168; 2021 SDR Allocation 29,216; concessional loan pledge relative to Allocation 0.6%
  - France: Received 111; Media Grant SRA EUR 1063 2 (as presented)
  - Germany: Received 146; Media Grant GSA EUR 828
  - Japan: Received 169; Media Grant and Investment in DIA GSA+SRA US$1719; 2021 SDR Allocation 29,540; concessional loan pledge relative to Allocation 0.6%
  - Netherlands: Received 48; Media Grant GSA EUR 2323
  - United Kingdom: Received 111; Media Concessional loan SDR 250; Status Effective; 2021 SDR Allocation 19,318; concessional loan pledge relative to Allocation 1.3%
  - United States: Received 456; Media Grant SRA US$55
  - European Commission: Received -; Media Grant GSA, ECS, SCS EUR 7878
  - Total Received: 1,380; Total Grant 763; Total Implicit Subsidy 250-; Total Investment and Deposit 294-; To be Determined (TBD) 73-; Target Amount 2,300; Number of asks 61
  - Notes:
    - Total proposed amount covering the 61 asks equals SDR 2.3 billion in NPV terms as of end-2020.
    - Several pledged amounts are subject to completion of domestic procedures.
    - The loan resources have been provided at a concessional rate and are estimated will generate about SDR 250 million in implicit subsidies, subject to SDR interest rate assumptions.
- Table 3. Status of RST Funding (In SDR billions, as of end-June, 2023) — selected entries
  - Australia: RST contribution 0.9; 2021 SDR allocation 6.3; Contribution as share of 2021 SDR allocation 15%
  - Belgium: 0.7; 6.1; 11%
  - Canada: 1.4; 10.6; 13%
  - China: 6.0; 29.2; 21%
  - France: 3.1; 19.3; 16%
  - Italy: 1.9; 14.4; 13%
  - Japan: 5.0; 29.5; 17%
  - Korea: 0.9; 8.2; 11%
  - Lithuania: 0.08; 0.4; 20%
  - Luxembourg: 0.25; 3.1; 20%
  - Malta: 0.02; 0.2; 14%
  - Netherlands: 1.2; 8.4; 15%
  - Oman: 0.03; 0.03; 0.57%
  - Singapore: 0.7; 3.7; 20%
  - Spain: 1.4; 9.1; 16%
  - United Kingdom: 2.5; 19.3; 13%
  - Subtotal: 26.1; 15%
  - Standalone contributions:
    - Estonia: 0.025; 0.2; 11%
    - Germany: 5.1; 25.5; 20%
  - Grand total: 31.2; 15%
  - Notes:
    - The table reports amounts pledged or contributed; pledges may exclude reserve account contribution; some pledges subject to domestic procedures.
    - Fundraising target of SDR 33 billion was set for contribution packages to all three RST accounts.
    - A 'standalone contribution' refers to contributions to the deposit and/or reserve accounts, normally with a maturity of 10 years.

*Source: 2021 SPECIAL DRAWING RIGHTS ALLOCATION—EX-POST ASSESSMENT REPORT—BACKGROUND PAPERS, IMF*

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_Source: https://www.imf.org/-/media/files/publications/pp/2023/english/ppea2023035-s001.pdf_