## _040711

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### Projected FY 2011 income position — summary and drivers
- Net operational income projected: SDR 292 million (current), compared with SDR 328 million at the midyear review.
- Main changes from midyear:
  - Lending income: +SDR 8 million.
  - Investment Account (IA) returns: -SDR 31 million; FY 2011 IA income now projected at SDR 56 million (previously SDR 87 million).
  - Implicit returns on interest-free resources: -about SDR 9 million; average SDR interest rate for FY 2011 expected to be 0.3 percent (previously 0.4 percent).
  - Net expenditures: about SDR 4 million higher (projected budget outturn +SDR 21 million; US$/SDR exchange-rate effects -SDR 17 million).
- Table 1 key lines (millions of SDRs):
  - Net operational income projected (EBS/10/224): 328
  - Income variances: -32
    - Updated lending projections: 8
    - Investment Account returns: -31
    - Income from interest-free resources: -9
  - Expenditure variances: 4
    - Projected budget outturn: 21
    - US$/SDR exchange rate: -17
  - Net operational income position now projected (1 + 2 - 3): 292

### FY 2011 net income composition, gold sales, and IA placement
- Net income position (current projection, Table 2 / summary): SDR 3,845 million.
  - Components:
    - Net operational income: SDR 292 million.
    - Gold profits: SDR 3,100 million.
    - Surcharges: SDR 497 million.
  - IAS 19 timing adjustment: -SDR 44 million (actuarially determined IAS 19 expense SDR 148 million; funding projected SDR 104 million; timing difference SDR 44 million reduces net income).
- Gold sales and IA:
  - Total gold sales profits (cumulative): SDR 6.85 billion transferred to the IA in March 2011.
  - IA effectively has two tranches:
    - Gold-funded tranche: SDR 6.85 billion (placed in short-term deposits as interim measure).
    - Non-gold tranche: about SDR 6.13 billion (SDR 5.96 billion from June 2006 reserves transfer plus SDR 172 million transferred last year).
  - Staff proposes retaining about SDR 4 million of projected FY 2011 earnings in the gold-funded portion of the IA portfolio; no Board decision required for reinvestment of IA earnings.

### Disposition decisions and reserve placement (FY 2011)
- Decisions in effect:
  - Margin for basic rate of charge in FY 2011 set at 100 basis points under exceptional circumstances clause of Rule I-6(4).
  - Limited gold sales: 12,965,649 fine troy ounces sold on market basis; profits key element of new income model; sales concluded December 2010.
  - Surcharge disposition: net operational income from surcharges (after administrative costs) transferred to General Reserve at year-end.
  - PRGT administrative expenses (FY 2010–2012): no reimbursement to GRA; estimated PRGT FY 2011 expense SDR 46.411 million to be transferred from PRGT Reserve Account to General Subsidy Account.
  - Burden sharing for unpaid charges: income losses shared equally between debtor and creditor members per existing mechanism.
- Proposed placements of FY 2011 gold profits (SDR 3.1 billion):
  - Place SDR 0.6 billion to the special reserve (consistent with funding a total gold endowment at average price US$850/oz of SDR 4.4 billion). Gold-profits-to-special-reserve excluded from precautionary balances computation.
  - SDR 0.7 billion distributed to membership to support the PRGT (per 2009 strategy).
  - SDR 1.75 billion of windfall profits placed in the general reserve (proposed Decision No. 6). These reserve placements from gold profits also excluded from precautionary balances.

### IA income transfer and GRA placement (proposed Decisions Nos. 5–7)
- Staff proposal to transfer IA income from the tranche not funded by gold profits to the GRA for FY 2011 administrative expenses:
  - Projected IA income from non-gold tranche: SDR 52 million (proposed Decision No. 5).
  - With this transfer, estimated GRA net operational income: SDR 288 million — staff proposes placing that net amount in the special reserve (proposed Decision No. 6).
- Projected precautionary balances at end-FY 2011 (excluding gold profits):
  - Special reserve: SDR 2.9 billion.
  - SCA-1: SDR 1.2 billion.
  - General reserve (projected end-FY2011): SDR 4.0 billion.
  - Total precautionary balances: SDR 8.1 billion (below agreed minimum floor of SDR 10 billion).
- Availability and proposed transfer of GRA currencies to IA:
  - Estimated available amount for transfer at end-FY 2011 (assuming IA income used for GRA admin expenses): about SDR 741 million.
  - Staff proposes transferring the full estimated SDR 741 million to the IA for investment (proposed Decision No. 7).
  - IA objective: seek returns exceeding the SDR interest rate over time while minimizing negative returns and underperformance over a 12-month horizon.

### FY 2012 income outlook and margin on the rate of charge (Decision No. 8)
- FY 2012 net operational income projected: about SDR 482 million (Table 4).
- Board-endorsed principles for setting the margin (March 2008):
  - Margin set in a stable and predictable manner as a margin over the SDR interest rate to cover intermediation costs and reserve buildup.
  - Mechanism to check alignment with long-term credit market conditions.
- Key inputs:
  - Projected intermediation costs for FY 2012: US$117 million.
  - Fund credit outstanding average projected to increase about 54 percent to SDR 83 billion (from an average of SDR 54 billion in FY 2011).
  - Commitment fee income variability: projected commitment fees SDR 5 million in FY 2012 vs SDR 159 million in FY 2011.
  - IA projections: gold-funded IA tranche assumed to broadly earn the SDR rate in FY 2012; non-gold tranche assumed to have a 50 basis point spread over the SDR rate; sharp rise in interest rates could cause weaker performance or losses on the non-gold tranche.
- Staff proposal:
  - Set the margin at 100 basis points for FY 2012 under the exceptional circumstances clause of Rule I-6(4) (Decision No. 8).
  - At 100 basis points:
    - FY 2012 net operational income would be SDR 0.5 billion.
    - With projected surcharge income, precautionary balances projected to increase by SDR 1.5 billion to about SDR 9.6 billion at end-FY 2012 (still below the minimum SDR 10 billion floor and below the indicative medium-term target SDR 15 billion).
  - Cross-check: basic rate of charge with 100 basis points would be 1.47 percent and remains well below current market rates.

### Annex II — Risks to IA portfolio from rising bond yields (summary)
- Portfolio composition (non-gold tranche):
  - Domestic government bonds of euro area, Japan, the United Kingdom, and the United States, and BIS medium-term instruments (MTIs).
  - MTIs yield based on AA-rated swap yield curve; higher initial yield but subject to swap spread widening risk.
- Market environment:
  - After falls (2007–2009) yields remained low (2009–2010); one-year forward yields in SDR terms for 1–3 year segment about 80 basis points higher than current levels.
  - Rapidly rising yields may cause short-term capital loss or underperformance against the three-month SDR rate; over time higher average yields improve absolute and relative IA performance.
- Scenarios analyzed (examples):
  - Yields remain unchanged from end-February 2011.
  - Yields follow market forward rates.
  - Yields +/- 25 and 50 basis points relative to forwards.
  - Yields increase 100 basis points above market forward rates.
- Sensitivities (Table 5 highlights):
  - SDR interest rate change by 50 basis points — Implicit returns: 23.
  - Credit tranche purchases (non-FCL) change by SDR 10 billion — 290.
  - U.S. Dollar vs SDR change by 5 percent — 31.
  - Investment income margin change by 50 basis points — 65.
- Operational implication:
  - Rapidly rising yields pose short-term capital loss risk relative to three-month SDR rate; higher average yields over time should improve IA returns.
  - IA rules and regulations to be reviewed in light of Expanded Investment Mandate effective February 2011.

### Annex III — Framework on margin for the rate of charge (high level)
- Primary rationale and principles reiterated:
  - Margin to be stable, predictable, and a margin over the SDR rate to cover intermediation costs and reserve buildup.
  - Develop mechanism to align rate with long-term credit market conditions.
- Intermediation costs and income from margin (selected rows preserved as in source):
  - A. Intermediation costs 1/: 120, 89, 104, 119, 111, 117 (FY 2007–FY 2012).
  - B. Service charges: 16, 20, 122, 164, 222, 209.
  - C. Commitment fees 2/: 7, 34, 12, 62, 48, 8.
  - D. Costs to be covered by income from margin (A - B - C): 96, 66, -22, -17, -1, -359, -100 (row preserved).
  - E. Income from margin (examples preserved in source formatting for 50/100/150 bps).
  - F. Potential reserve accumulation (E - D) and G. Potential reserve accumulation (percent) presented for 50/100/150 bps (rows preserved as in source).
- Reserve accumulation summary:
  - With margin of 100 bps, potential reserve accumulation would be US$1.4 billion for FY 2012 (about 13 percent of existing reserves).
  - Total amounts available including surcharges: US$2.9 billion (SDR 1.9 billion).
  - Actual reserve growth in FY 2012, including surcharges, projected at US$2.3 billion or SDR 1.5 billion.
- Cross-checks:
  - Framework uses term-premium and credit-risk proxies (Measure 1 and Measure 2; EMBI and advanced-country spreads) to ensure Fund lending cost remains reasonable relative to market borrowing.
  - Conclusion: cost of borrowing from Fund remains below current market rates; 100 basis points margin remains below average spreads faced by previous Fund borrowers.

### Annex IV–V — Assumptions and selected projections (selected lines preserved)
- Annex IV selected assumptions (FY 2012 projections; units in billions of SDRs and percent):
  - Purchases (excl. reserve tranche purchases): 22.2, 27.3, 28.8, 27.0.
  - Repurchases: 2.0, 2.3, 2.3, 3.3.
  - Average balances subject to charges: 51.5, 54.3, 53.9, 83.3.
  - Average investment account assets - reserves 1/: 6.1, 6.1, 6.1, 6.1.
  - Average investment account assets - gold profits 2/: -, -, 1.1, 6.8.
  - Return on investments 3/: 0.65, 1.42, 0.85, 1.3.
  - Average interest rates (SDR interest rate and basic rate of remuneration): 0.30, 0.40, 0.30, 0.80.
  - Basic rate of charge: 1.30, 1.40, 1.30, 1.80.
  - Margin on the rate of charge: 1.00, 1.00, 1.00, 1.00.
- Annex V selected projected income and expenses (SDR millions):
  - Periodic charges, including burden sharing: Actual to end-Feb 2011 569; Mid-year Projections 747; Updated Projections 723; Projections 1,543.
  - Interest on SDR holdings: 10; 12; 13; 36.
  - Surcharges: 399; 528; 497; 981.
  - Investment income: 408; 756; 144.
  - Service charges 1/: 270; 293; 305; 140.
  - Reimbursements: 34; 44.
  - Total income: 1,291; 1,671; 1,598; 2,848.
  - Total expenses: 635; 815; 853; 1,385.
  - Net operational income position (C): 656; 856; 745; 1,463.
  - Gold profits: 3,100; 2,960; 3,100; 0.
  - Net income position 3/: 3,756; 3,816; 3,845; 1,463.

### Annex VI — Cumulative burden sharing adjustments (selected member highlights)
- Aggregate totals (SDR millions, as of end-January 2011):
  - Adjustments for Deferred Charges: Charges 349.7; Remuneration 349.9; Total 699.6; of total 100.00.
  - Adjustments for SCA-1: Charges 603.8; Remuneration 583.9; Total 1,187.7; of total 100.00.
- Selected member entries (SDR millions, values preserved exactly):
  - Albania — Deferred Charges: Charges 0.1; Remuneration 0.0; Total 0.1; of total 0.01. SCA-1: Charges 0.1; Remuneration 0.0; Total 0.1; of total 0.01.
  - Argentina — Deferred Charges: Charges 31.0; Remuneration -; Total 31.0; of total 4.43. SCA-1: Charges 64.7; Remuneration -; Total 64.7; of total 5.45.
  - Brazil — Deferred Charges: Charges 23.8; Remuneration 0.0; Total 23.8; of total 3.41. SCA-1: Charges 157.4; Remuneration -; Total 157.4; of total 4.83.
  - China — Deferred Charges: Charges 4.0; Remuneration 7.7; Total 11.7; of total 1.68. SCA-1: Charges 83.5; Remuneration 16.2; Total 19.7; of total 1.66.
  - India — Deferred Charges: Charges 24.0; Remuneration 2.4; Total 26.3; of total 3.77. SCA-1: Charges 28.4; Remuneration 3.4; Total 31.9; of total 2.68.
  - Japan — Deferred Charges: Charges -; Remuneration 39.7; Total 39.7; of total 5.68. SCA-1: Charges -; Remuneration 64.5; Total 64.5; of total 5.43.
  - Mexico — Deferred Charges: Charges 38.3; Remuneration 0.7; Total 39.0; of total 5.57. SCA-1: Charges 57.0; Remuneration 1.2; Total 58.2; of total 4.90.
  - United States — Deferred Charges: Charges -; Remuneration 101.0; Total 101.0; of total 14.43. SCA-1: Charges -; Remuneration 157.9; Total 157.9; of total 13.30.
  - Zimbabwe — Deferred Charges: Charges 0.8; Remuneration -; Total 0.8; of total 0.12. SCA-1: Charges 1.6; Remuneration -; Total 1.6; of total 0.14.
- Notes: figures reported in SDR millions; "Values of 0.0 represent amounts of less than SDR 0.1 million"; "-" denotes no adjustments. Adjustments to charges and remuneration are billed quarterly.

*Source: Projected Income Position—FY 2011 (IMF PDF content unit _040711).*

### 1. Projected Income Position—FY 2011 ...................................................................................

### 1. Projected Income Position—FY 2011

### Introduction
- Paper reviews the Fund’s income position for FY 2011 and FY 2012, updating projections from the FY 2011 midyear review and proposing related decisions for the current and next financial years.
- Structure:
  - Section II: Review of the FY 2011 income position and changes from midyear projections.
  - Section III: Proposals on disposition of net operational income and placement of net income, including profits from limited gold sales, to reserves.
  - Section IV: Margin on the rate of charge for FY 2012, FY 2012 income outlook, and projected burden sharing adjustments.
  - Section V: Review of special charges.

### Review of the FY 2011 Income Position
- FY 2011 net operational income:
  - Projected at SDR 292 million (current), compared with SDR 328 million at the midyear review.
- Key drivers of changes from prior projection:
  - Lending income: SDR 8 million higher than midyear projections.
    - Projections include lending income only from arrangements already approved and assume scheduled purchases; include commitment fee income from precautionary arrangements (including FCLs) at cancellation or expiration.
  - Investment Account (IA) income: SDR 31 million lower than previously projected.
    - Ten months through end-February 2011: investment income totaled SDR 40 million, an unannualized return of 67 basis points, outperforming the three-month SDR interest rate by 40 basis points.
    - IA benefited from falling bond yields until fall 2010; since the third quarter of FY 2011 rising bond yields in U.S. and Europe reduced IA performance.
    - Assuming yields remain unchanged, FY 2011 IA income projected at SDR 56 million (previously SDR 87 million).
  - Implicit returns on interest-free resources: lower by about SDR 9 million.
    - Average SDR interest rate for FY 2011 expected to be 0.3 percent (previously 0.4 percent).
  - Net expenditures: about SDR 4 million higher than midyear review.
    - Increase in projected budget outturn: SDR 21 million.
    - US$/SDR exchange-rate effects reduce expenditures by SDR 17 million in SDR terms.
- Table 1 summary (selected lines, all figures in millions of SDRs):
  - 1 Net operational income projected (EBS/10/224): 328
  - 2 Income variances: -32
    - Changes due to:
      - Updated lending projections: 8
      - Investment Account returns: -31
      - Income from interest-free resources: -9
  - 3 Expenditure variances: 4
    - Changes due to:
      - Projected budget outturn: 21
      - US$/SDR exchange rate: -17
  - 4 Net operational income position now projected (1 + 2 - 3): 292

### Decisions in Effect Related to the FY 2011 Income Position (Box 1)
- Rate of Charge:
  - Margin for calculating the basic rate of charge in FY 2011 set at 100 basis points under exceptional circumstances clause of Rule I-6(4).
- Limited Gold Sales:
  - Limited sales of 12,965,649 fine troy ounces of gold acquired after the second amendment of the Articles may take place on the basis of market prices.
  - Creation of an endowment with profits from gold sales is a key element of the new income model.
  - Sales began in FY 2010 and concluded in December 2010.
- Disposition of Surcharges:
  - After administrative costs, any remaining net operational income from surcharges on purchases in credit tranches and under the Extended Fund Facility shall be transferred, after the end of the financial year, to the General Reserve.
- PRGT Administrative Expenses:
  - For financial years 2010 through 2012, no reimbursement shall be made to the GRA from the Reserve Account of the PRGT for the cost of administering the PRGT.
  - Estimated cost of administering the PRGT to be transferred after the end of each financial year from the PRGT Reserve Account (through the Special Disbursement Account) to the General Subsidy Account of the PRGT.
- Burden Sharing for Deferred Charges:
  - Income losses from unpaid charges are shared equally between debtor and creditor members under the burden sharing mechanism largely pursuant to a 2000 decision; mechanism continues while overdue obligations persist.
- PCDR and MDRI-I Trust Administrative Expenses:
  - Reimbursements and arrangements described for administration costs of SDA resources in PCDR Trust and MDRI-I Trust.

### Reimbursements and Specific Expense Items
- GRA reimbursements for FY 2011 (unchanged from midyear projections):
  - GRA reimbursed for expenses of conducting the SDR Department through an assessment on participants in the SDR Department (proposed Decision No. 1).
  - GRA reimbursed for expenses of administering the MDRI-I and PCDR Trusts (proposed Decision Nos. 2 and 3).
  - Estimated expenses:
    - SDR Department: SDR 2.734 million
    - MDRI-I Trust: SDR 0.755 million
    - PCDR Trust: SDR 0.493 million
- PRGT reprovision:
  - Executive Board decided July 2009 that for financial years 2010–2012, the GRA would forego reimbursement; an amount equivalent to estimated PRGT administration cost transferred from PRGT Reserve Account to General Subsidy Account.
  - Estimated PRGT expenses for FY 2011: SDR 46.411 million.

### Updated FY 2011 Projections (Table 2 highlights; figures in millions of SDRs)
- A. Operational income:
  - Initial projections: 872
  - Midyear projections: 964
  - Current projections: 932
- Lending income:
  - Initial: 734
  - Midyear: 836
  - Current: 844
  - Margin for rate of charge: initial 515; midyear 543; current 539
  - Service charges 2/: initial 219; midyear 293; current 305
- Investment income 3/:
  - Initial: 74
  - Midyear: 87
  - Current: 56
- Interest-free resources:
  - Initial: 60
  - Midyear: 37
  - Current: 28
  - SCA-1 and other: initial 45; midyear 27; current 21
  - Gold book value: initial 15; midyear 10; current 7
- Reimbursements:
  - 4 (MDRI-I, PCDR Trusts and SDR Department)
- B. Expenses:
  - Initial: 670
  - Midyear: 636
  - Current: 640
  - Net administrative expenditures: initial 631; midyear 597; current 603
  - Capital budget items expensed: 7 (consistent across)
  - Depreciation: initial 32; midyear 32; current 30
- C. Net operational income position (A - B):
  - Initial: 202
  - Midyear: 328
  - Current: 292
- Gold profits 3/:
  - Initial: 2,422
  - Midyear: 2,960
  - Current: 3,100
- Surcharges:
  - Current projection: 497 (previously 528)
- Restructuring costs: -300 (midyear adjusted)
- IAS 19 timing adjustment: -44
- Net income position 5/:
  - Initial: 3,120
  - Midyear: 3,816
  - Current: 3,845
- Fund credit (average stock, SDR billions): initial 51.5; midyear 54.3; current 53.9
- SDR interest rate (in percent): initial 0.7; midyear 0.4; current 0.3
- US$/SDR exchange rate: 1.50 (initial and midyear); current 1.54

### Disposition Decisions (FY 2011 Net Income and IA Placement)
- FY 2011 net income projection:
  - SDR 3.8 billion (noting Table 2 shows net income position 5/ current projection SDR 3,845 million).
  - Components:
    - Net operational income: SDR 292 million
    - Gold profits: SDR 3.1 billion
    - Surcharges: SDR 497 million
  - Net income projection takes account of IAS 19 expense of SDR 44 million.
- Investment Account (IA) status following gold profits transfer:
  - Gold sales profits (total SDR 6.85 billion) transferred to IA in March 2011 after amendment to broaden investment mandate became effective.
  - IA now effectively has two separate portfolios:
    - New tranche funded by gold profits: SDR 6.85 billion, placed in short-term deposits as interim measure.
    - Remaining tranche: about SDR 6.13 billion, funded by transfer of currencies from GRA equivalent to Fund’s total reserves in June 2006 (SDR 5.96 billion) plus SDR 172 million transferred last year.
- Treatment of IA investment income:
  - Under the Articles, IA investment income may be invested, held in the IA, or used for meeting expenses of conducting the business of the Fund.
  - A separate work program addresses use of gold sales profits, windfall profits over those envisaged in April 2008 income model endorsement, and establishing new rules/regulations for the IA, including the gold-funded endowment.
  - Staff proposal: modest projected earnings from investment of gold profits in FY 2011 of about SDR 4 million be retained in the gold-funded portion of the IA portfolio. No Board decision required for this reinvestment of IA earnings.
- Other notes:
  - FY 2011 surcharges projected at SDR 497 million, somewhat lower than earlier projection of SDR 528 million, reflecting rephasing of purchases under some arrangements and, to a modest extent, entry into force of the 2008 Quota and Voice Reforms with ad-hoc quota increases.
  - Restructuring costs winding down:
    - Staff delay period costs: SDR 0.4 million in first three quarters of FY 2011.
    - Costs related to restructuring provision (no rendered services expected): SDR 15 million charged against provision established in April 2008.
  - Pension and employee benefits (IAS 19):
    - Actuarially determined IAS 19 expense for FY 2011: SDR 148 million.
    - Funding projected at SDR 104 million.
    - Timing difference: SDR 44 million reduces net income.

*Source: Projected Income Position—FY 2011 (IMF PDF content unit).*

### 9.      Staff proposes that an amount equivalent to the income from the IA’s tranche

### 9.      Staff proposes that an amount equivalent to the income from the IA’s tranche not funded by gold profits be transferred to the GRA for meeting administrative expenses of the Fund in FY 2011 (proposed Decision No. 5)

### Transfer of IA income to the GRA and impact on net income and precautionary balances
- Staff proposes transferring the IA income from the tranche not funded by gold profits (projected at SDR 52 million) to the GRA to meet administrative expenses in FY 2011 (proposed Decision No. 5).
- Rationale:
  - Since the IA was established in June 2006, annual practice has been to transfer IA income to the GRA to meet the expenses of conducting the business of the Fund.
  - This is consistent with the new income model principle that lending income should no longer cover all the costs of the Fund.
  - The transfer would modestly increase GRA net income and contribute to the buildup of precautionary balances given heightened credit risks.
- Contextual notes:
  - The GRA recorded a surplus in FY 2011 but is expected to generally record a loss over the medium term without transfers from the IA because the IA carries all administrative, remuneration and interest expenses of the Fund.

### GRA net operational income and placement to special reserve (proposed Decision No. 6)
- Assuming the IA transfer, GRA net operational income is estimated at SDR 288 million and staff proposes that the net amount be placed in the special reserve (proposed Decision No. 6).
- Legal and historical context:
  - Article XII, Section 6(a) permits the Fund’s net income to be distributed to members or placed to the general or special reserve.
  - Since the 1970s, practice has been to place GRA annual net income to the special reserve; surcharge income in FY 1998‒2006 was placed to the general reserve.
- Projected balances at end-FY 2011 (excluding gold profits):
  - Special reserve balance: SDR 2.9 billion.
  - SCA-1 balance: SDR 1.2 billion.
  - General reserve balance (projected at end-FY2011): SDR 4.0 billion.
  - Total precautionary balances (special reserve + general reserve + SCA-1): SDR 8.1 billion, still below the agreed minimum floor of SDR 10 billion.
- Staff note: Consideration could be given in the future to allocating a portion of surcharge income to the special reserve, taking account of projected path and adequacy of precautionary balances.

### Availability for additional transfers of GRA currencies to the IA and proposed transfer (proposed Decision No. 7)
- Historical note: Last year was the first time since IA establishment that total reserves rose above the FY 2006 total reserves level, providing scope for further transfers of GRA currencies to the IA.
- Article XII, Section 6(f)(ii) permits transfer of further GRA currencies to the IA when reserves are above the cumulative amount of previous transfers.
- Estimated available amount for transfer at end-FY 2011 (assuming proposed use of IA income for GRA administrative expenses): about SDR 741 million.
  - Calculation basis: GRA net operational income (SDR 288 million) and surcharges (SDR 497 million), less IAS 19 and restructuring expenses (SDR 44 million).
- Staff proposes transferring the full available amount estimated at SDR 741 million to the IA for investment (proposed Decision No. 7).
  - IA objective: achieve investment returns that exceed the SDR interest rate over time while minimizing frequency and extent of negative returns and underperformance over a 12-month investment horizon.
  - Past IA performance has generally been positive.
  - Staff recognizes higher risks of under-performance in the current low interest rate environment.

### Disposition of FY 2011 gold profits
- Board precedent: FY 2010 gold profits of SDR 3.8 billion were placed in the special reserve.
- Staff proposal for FY 2011 gold profits (total SDR 3.1 billion):
  - Place SDR 0.6 billion of the SDR 3.1 billion in gold profits into the special reserve, consistent with funding a total gold endowment (at an average sales price of US$850 per ounce) of SDR 4.4 billion.
    - Gold profits placed to special reserve would be excluded from computation of the Fund’s precautionary balances.
  - The remaining SDR 2.5 billion:
    - SDR 0.7 billion to be distributed to the membership to provide additional resources to support the PRGT (as per the 2009 strategy).
    - SDR 1.75 billion of windfall profits from the gold sales to be placed in the general reserve (proposed Decision No. 6).
  - These reserves placed from gold profits would also not be considered part of the Fund’s precautionary balances.

### FY 2012 income outlook and principles for setting the margin on the rate of charge
- Overall outlook:
  - Income outlook for FY 2012 points to a positive outturn.
  - Demand for Fund financing expected to remain strong; projections sensitive to timing of purchases and repurchases, SDR interest rate, and U.S. dollar/SDR exchange rate.
- Principles endorsed by the Board in March 2008 for the basic rate of charge:
  - Margin should be set in a stable and predictable manner.
  - Margin should be set as a margin over the SDR interest rate to cover intermediation costs and buildup of reserves, not to cover the full range of Fund activities.
  - A mechanism should check alignment of the rate of charge with long-term credit market conditions to avoid Fund borrowing becoming too expensive or too low relative to market borrowing.
- Implementation status:
  - Since FY 2009 the margin has been set consistent with these principles but under the exceptional circumstances clause of Rule I-6(4).
  - Staff intends to return to the Board with proposals for a new rule for the margin; in the interim proposes setting the margin under the exceptional circumstances clause consistent with the 2008 principles.

### Key considerations and staff proposal on the margin for FY 2012 (Decision No. 8)
- Intermediation costs:
  - Projected intermediation costs for FY 2012: US$117 million.
  - Derived from departmental estimates on costs related to the generally available facilities (GAF) and estimated GAF share in Fund outputs; measurement improvements expected with ACES becoming operational in FY 2012.
- Lending income:
  - Given high lending levels, income from service charges and commitment fees alone is projected to more than cover intermediation costs (as in FY 2009‒11).
  - Commitment fee income has become larger and more variable reflecting FCL introduction and extension of its maximum term to two years.
  - For now, commitment fee income is included when assessing the margin, but this may be revisited.
- Reserve accumulation simulations at three margin levels: 50, 100 and 150 basis points.
  - Staff proposes a margin of 100 basis points.
  - At 100 basis points:
    - FY 2012 net operational income would be SDR 0.5 billion.
    - With projected surcharge income, precautionary balances projected to increase by SDR 1.5 billion to about SDR 9.6 billion at end-FY 2012.
    - This approaches but remains below the minimum floor of SDR 10 billion and well below the indicative medium-term target of SDR 15 billion.
  - Staff views the projected pace of reserve accumulation with a 100 basis point margin as adequate and broadly consistent with prior Board discussions.
- Cross-check against market borrowing costs:
  - The Fund’s basic rate of charge with a margin of 100 basis points is 1.47 percent and remains well below current market rates, including after applying surcharges.
  - The unusually wide differential primarily reflects the very low SDR rate; staff does not consider adjusting the margin to offset this likely short-term cyclical development, given projected relatively high reserve accumulation.
- Staff proposal:
  - In application of the exceptional circumstances clause of Rule I-6(4), keep the margin for the rate of charge at 100 basis points for FY 2012 (Decision No. 8).

### FY 2012 projections and sensitivities
- Projected FY 2012 net operational income: about SDR 482 million (Table 4).
  - This is broadly the same as the previous projection of SDR 499 million in January; slight decrease mainly from lower lending income due to rephasing of purchases, partially offset by improved investment income outlook.
- Key factors affecting FY 2012 income outlook:
  - Fund credit outstanding projected average increase by about 54 percent to SDR 83 billion from an average of SDR 54 billion in FY 2011.
    - Projected increase in lending income is much smaller at just over 15 percent compared to FY 2011 due to fluctuations in commitment fees (projected at SDR 5 million in FY 2012 vs SDR 159 million in FY 2011).
  - Investment income increase owing to completion of gold sales and transfer of profits to the IA:
    - Gold profits in the IA placed in short-term deposits on a transitional basis and assumed to broadly earn the SDR rate during FY 2012.
    - Projections for the IA tranche not funded by gold profits assume a 50 basis point spread of IA income over the SDR interest rate throughout FY 2012.
    - A sharp rise in interest rates could lead to weaker performance or even losses on this tranche, which comprises government bonds and medium-term instruments issued by the BIS.
  - Increase in income from interest free resources due to retention of sale proceeds equivalent to the book value of gold sold (SDR 2.7 billion) in the GRA, and secondary effects of higher lending income.
  - Net administrative and capital expenditures consistent with the budget paper.

*Source: IMF staff paper (FY 2011 income and FY 2012 outlook).*

### Annex II discusses the risks to this IA portfolio if bond yields rise from current levels. Consistent with past

### _040711 - Annex II: Risks to the IA Portfolio if Bond Yields Rise

### Investment mandate and portfolio composition
- The IA portfolio discussed excludes assets funded by gold profits and comprises domestic government bonds of countries in the euro area, Japan, the United Kingdom, and the United States, and BIS medium-term instruments (MTIs).
- MTIs are obligations of the BIS with a yield based on the AA-rated swap yield curve; they typically provide a higher initial yield than comparable government bonds but are subject to risk arising from the widening of swap spreads.
- The IA analyses use a long-run assumption that includes a projected added value of 50 basis points intended to provide an indication of the additional returns from the IA over the medium term. Actual year-to-year performance may vary with market conditions.

### Market environment and yield outlook
- After falling yields (2007–2009), government bond yields in the markets of the SDR basket remained relatively stable (2009–2010) and close to historical lows.
- Growth and inflation expectations are slowly increasing from recently suppressed levels, and market participants are anticipating a gradual tightening of monetary conditions (except in Japan).
- One-year forward yields in SDR terms for bonds in the 1–3 year segment are about 80 basis points higher than current levels.
- For the IA portfolio, rapidly rising yields may present a short-term risk of capital loss or underperformance against the three-month SDR rate. Over time, higher average yields will benefit the IA’s performance both in absolute terms and relative to the SDR rate.

### Scenarios analyzed for IA returns (through end-FY 2011 and in FY 2012)
- The analysis assesses eight possible scenarios; examples enumerated in the annex include:
  1. Yields remain unchanged from end-February 2011 levels;
  2. Yields follow market forward rates (as in Figure 1);
  3. Yields increase or decrease by 25 and 50 basis points above or below market forward rates;
  4. Yields increase 100 basis points above market forward rates.

### Key fiscal and income figures (FY 2011 and FY 2012 as presented)
- A. Operational income: 9321160
  - Lending income: 844975
    - Margin for the rate of charge: 539835
    - Service charges 1/: 305140
  - Investment income 2/: 56144
  - Interest free resources 3/: 2837
    - SCA-1 and other: 2116
    - Gold book value: 721
  - Reimbursements: 44
    - MDRI-I, PCDR Trusts and SDR Department: 44
- B. Expenses: 640678
  - Net administrative expenditures: 603635
  - Capital budget items expensed: 79
  - Depreciation: 3034
- C. Net operational income position (A-B): 292482
- Gold profits 4/: 3,100 and 0 (two entries shown)
- Surcharges 5/: 497981
- IAS 19 timing adjustment 6/: -44
- Net income position 7/: 3,845 and 1,463 (two entries shown)
- Fund credit (average stock, SDR billions): 53.983.5
- SDR interest rate (in percent): 0.30.8
- US$/SDR exchange rate: 1.541.55
- Precautionary balances (end of period, SDR billions): 8.19.6

### Sensitivity analysis highlights (Table 5)
- Change in: SDR interest rate by 50 basis points — Implicit returns 1/: 23
- Change in: Credit tranche purchases (non-FCL) by SDR 10 billion 2/ — 290
- Change in: U.S. Dollar vis-à-vis SDR by 5 percent — 31
- Change in: Investment income margin by 50 basis points — 65

### Operational and policy implications
- Surcharges are projected to increase significantly to almost SDR 1 billion, from about half that amount in FY 2011; this reflects projected higher Fund credit outstanding and will help accumulate needed precautionary balances that remain below the minimum floor of SDR 10 billion.
- Consistent with practice resumed in FY 2011, these surcharges would be placed to reserves at the end of the financial year (a decision on placement to reserves will be included in the April 2012 income paper).
- Rapidly rising yields pose short-term capital loss risk relative to the three-month SDR rate, but higher average yields over time should improve IA absolute returns and returns relative to the SDR rate.
- The IA rules and regulations will need to be reviewed in light of the amendment of the Articles for an Expanded Investment Mandate which became effective in February 2011.

*Source: _040711 - Annex II discusses the risks to this IA portfolio if bond yields rise from current levels. Consistent with past*

### 5. Bond yields increase 100 basis points above market forward rates and swap spreads

### 5. Bond yields increase 100 basis points above market forward rates and swap spreads

### Scenario description and key findings
- Bond yields increase 100 basis points above market forward rates and swap spreads on MTIs widen by an additional 50 basis points (i.e. MTI yields increase by 150 basis points above forwards).
- Under the current investment strategy:
  - Positive returns could be achieved if rates stay unchanged or increase modestly.
  - Against the SDR interest rate, the IA portfolio could break even if bond yields increase by 34 basis points over the next fiscal year (i.e., by 47 basis points less than implied by market forwards).
  - A rise in yields in line with or above current market expectations could result in short-term capital losses.
  - The investment strategy is to beat the three-month SDR rate over time; periodic short-term underperformance should be expected.

### Investment Account performance scenarios (unannualized returns in percent)
- Actual Returns FYTD (May 2010–February 2011)
  - 3-Month SDR/GRA 0.27
  - Bond 0.68
  - MTIs 0.66
  - IA 0.67
  - Excess Return 0.40
- Forecast FY 2011 (scenarios by forwards)
  - 3-Month SDR/GRA: 0.35, 0.36, 0.36, 0.37, 0.37, 0.38, 0.39, 0.39
  - Bond: 0.87, 0.78, 0.71, 0.64, 0.57, 0.49, 0.35, 0.35
  - MTIs: 0.87, 0.78, 0.71, 0.63, 0.56, 0.49, 0.34, 0.20
  - IA: 0.87, 0.78, 0.71, 0.64, 0.56, 0.49, 0.35, 0.28
  - Excess Return: 0.52, 0.42, 0.35, 0.27, 0.19, 0.11, -0.04, -0.11
- FY 2012 (May 2011–April 2012) scenarios (by forwards)
  - 3-Month SDR/GRA: 0.47, 0.81, 0.99, 1.17, 1.35, 1.53, 1.89, 1.89
  - Bond: 1.15, 0.80, 0.51, 0.23, -0.06, -0.34, -0.91, -0.91
  - MTIs: 1.26, 0.91, 0.62, 0.34, 0.05, -0.24, -0.80, -1.37
  - IA: 1.20, 0.85, 0.57, 0.28, 0.00, -0.29, -0.86, -1.14
  - Excess Return: 0.73, 0.04, -0.42, -0.89, -1.35, -1.82, -2.74, -3.03
- Memo Items: Assumed Yields (Spot / 1-Year Forward)
  - 3-Month SDR/GRA 0.47 / 1.45
  - Bonds 1.14 / 1.94
  - MTIs 1.25 / 2.05
- Note: Table 7 (Investment Account Performance Scenarios) unannualized returns in percent. 1/ From March 8, 2011. Actual returns are based on audited performance data provided by State Street. Projections are based on current market levels for SDR weighted 3-month bills, and 2-year government notes, and 2-year MTIs, and on government bond forward rates. Sources: State Street data, Bloomberg, and staff calculations.

### Gold sales profits and interim treatment
- Gold sales profits were transferred to the IA in March 2011 after the amendment to broaden the Fund’s investment mandate became effective.
- These profits have been placed in short-term deposits with the BIS as an interim measure, pending Board decisions on new rules and regulations for the gold endowment and disposition of gold profits.
- The arrangement is intended to ensure the funds are liquid and do not face a risk of capital loss at the time of the relevant Board decisions.

---

### Annex III. Framework on the Margin for the Rate of Charge

### Rationale and principles
- The annex recaps the rationale for the new framework for setting the rate of charge and key principles previously endorsed by the Board:
  - The margin on the rate of charge should be set in a stable and predictable manner.
  - The margin should be set as a margin over the SDR interest rate to cover the Fund’s intermediation costs and the buildup of reserves (no longer cover the full range of the Fund’s activities).
  - A mechanism should be developed for checking alignment of the rate of charge with long-term credit market conditions, ensuring Fund borrowing cost is not too expensive or too low relative to market borrowing.
- Background: Projected decline in Fund credit and income shortfalls in FY 2007–08 created upward pressures on the Fund’s rate of charge. In 1981–2006, rate of charge decisions were driven by covering administrative expenses and accumulating reserves under a “net income target.” The shrinking Fund credit base would have led to unsustainable rate increases and high variability of the margin.
- Implementation status: New income model progressed significantly, but the gold endowment is not yet operational and reimbursements of the GRA for PRG Trust expenses have not yet resumed. Calculations of potential reserve accumulation from lending income in Table 8 (rows F and G) are currently hypothetical because lending income continues to cover a significant proportion of the Fund’s operating costs.

### Intermediation costs and income from margin (Table 8 highlights)
- A. Intermediation costs 1/: 120, 89, 104, 119, 111, 117 (FY 2007, FY 2008, FY 2009, FY 2010, FY 2011, FY 2012)
- B. Service charges: 16, 20, 122, 164, 222, 209
- C. Commitment fees 2/: 7, 34, 12, 62, 48, 8
  - C.1 FCL: 0, 0, 0, 125, 22, 28
  - C.2 Other: 7, 34, 22, 60
- D. Costs to be covered by income from margin (A - B - C): 96, 66, -22, -17, -1, -359, -100
- E. Income from margin (derived by applying the margin against average Fund credit outstanding at the average US$/SDR exchange rate):
  - E.1 50 basis points: 9, 15, 19, 32, 67, 41, 56, 47
  - E.2 100 basis points: 18, 21, 03, 18, 55, 34, 83, 01, 294 (note: present row formatting preserved as in source)
  - E.3 150 basis points: 27, 31, 54, 27, 88, 00, 124, 51, 941 (note: present row formatting preserved as in source)
- F. Potential reserve accumulation (E - D)
  - F.1 50 basis points: -5, -15, 1, 15, 4, 38, 77, 47, 47
  - F.2 100 basis points: 86, 37, 20, 77, 05, 11, 89, 13, 94
  - F.3 150 basis points: 177, 88, 30, 09, 71, 16, 04, 20, 41
- G. Potential reserve accumulation (as a percent) 4/
  - G.1 50 basis points: -0.1%, -0.2%, 1.4%, 4.8%, 8.2%, 7.0%
  - G.2 100 basis points: 1.0%, 0.4%, 2.4%, 7.7%, 12.7%, 13.0%
  - G.3 150 basis points: 2.0%, 1.0%, 3.5%, 10.6%, 17.1%, 19.1%
- H. Actual reserve accumulation 5/
  - H.1 50 basis points: -4, 10, -13, 2, -39, -100, 30, 97
  - H.2 100 basis points: -3, 19, -8, 15, 416, 744, 57, 44
  - H.3 150 basis points: -2, 28, -30, 14, 64, 34, 86, 01, 391
- I. Actual reserve accumulation (as a percent) 5/
  - I.1 50 basis points: -4.6%, -1.5%, -0.5%, -1.1%, 0.3%, 0.9%
  - I.2 100 basis points: -3.6%, -0.9%, 0.6%, 1.8%, 4.7%, 7.0%
  - I.3 150 basis points: -2.6%, -0.3%, 1.7%, 4.7%, 9.2%, 13.0%
- Memorandum items (selected)
  - Precautionary balances at the beginning of FY (in SDR billions) 6/: 7.7, 7.6, 6.9, 7.1, 7.3, 8.1
  - Average Fund credit outstanding (in SDR billions): 12.2, 6.7, 12.4, 34.2, 53.9, 83.5
  - Number of active arrangements (average): 10, 8, 10, 19, 23, 19
  - Average exchange rate U.S dollar/SDR: 1.49, 1.53, 1.49, 1.56, 1.54, 1.55
- Source: OBP, Finance Department, and staff estimates.
- Notes:
  - 4/ Potential reserve accumulation as a percent of reserves at the beginning of the financial year. Assumes other sources of income sufficient to cover remaining Fund annual costs.
  - 5/ Based on income projections in Table 4 for FY 2011 and FY 2012. FY 2007–10, based on the actual outcome. Excludes surcharge income.
  - 1/ Costs under "generally available facilities" item of the Fund's outputs for country programs and financial support.
  - 2/ Based on income projections for FY 2011–12, and actuals for FY 2007–10. Includes commitment fees for expired or cancelled precautionary arrangements in FY 2007–10.
  - 3/ Derived by applying the margin against average Fund credit outstanding at the average US$/SDR exchange rate.
- Reserve accumulation summary:
  - With a margin of 100 bps, potential reserve accumulation would be US$1.4 billion for FY 2012 (about 13 percent of existing reserves).
  - Total amounts available for reserve accumulation including income from surcharges would be US$2.9 billion (SDR 1.9 billion).
  - As new income model elements are not fully in place, actual reserve growth in FY 2012, including surcharges, is projected at US$2.3 billion or SDR 1.5 billion.

### Alignment with market borrowing costs and proxies
- The framework includes a cross-check to align the rate of charge with broader long-term market conditions.
- Fund lending characteristics:
  - Fund generally provides credit for 3 ¼–5 years (or 4 ½–10 years for extended fund facility) but charges a floating short-term interest rate (three-month SDR interest rate plus a margin).
  - Market borrowing spreads reflect country-specific, time-varying credit risk premium; Fund cannot set member-specific margins under the Articles.
- Two proxy elements to compare with market lending:
  - Term premium measures:
    - Measure 1: spread between yield on a five-year fixed rate (synthetic) SDR bond and the three-month interest rate (yields about 75–97 basis points; may overstate appropriate term premium).
    - Measure 2: difference in yields between a five-year (synthetic) SDR bond and the average three-month (synthetic) SDR rate implicit in futures market contracts over a five period (over longer term yields about 6–9 basis points).
    - Data for 2011 suggest both measures widened sharply in the crisis; Measure 2 over longer term yields about 6–9 basis points.
  - Credit risk premium measures:
    - Updated median EMBI spreads for emerging market groups and estimates of advanced country risk premium using five-year bond spreads.
    - For emerging markets, spreads narrowed in 2002–07; spreads for advanced countries increased sharply due to the financial crisis.
- Overall conclusion from proxies:
  - Cost of borrowing from the Fund remains below current market rates.
  - A margin of 100 basis points remains below the average spread faced by previous Fund borrowers in 2000–2011, and below average spreads in the bottom quartile for EMBI countries, and average spreads in the top quartile for advanced countries.

### Table 9 excerpts (Median spread, in SDR-equivalent basis points) 1/
- Five-year term premium (1992–2010 / 1999–2007 / 2002–2007 / 2008–2010 / 2011-to-date)
  - Measure 1 2/: 83.5, 74.9, 78.2, 96.7, 166.2
  - Measure 2 3/: n.a., 2.7, 5.7, 9.3, 30.5
- Country risk—EMBI-based measures
  - All EMBI countries: n.a., 396, 287, 172, 160
  - Countries in quartile with lowest spreads: n.a., 119, 85, 195, 161
  - Countries in decile with lowest spreads: n.a., 74, 53, 146, 137
  - Country with lowest spread: n.a., 42, 30, 74, 86
- Country risk—advanced country measure 5/
  - All advanced countries: n.a., 11.9, -4.3, 66, 72
  - Countries in quartile with highest spreads: n.a., 26, 17.4, 115, 200
  - Countries in decile with highest spreads: n.a., 111, 110, 212, 381
- Past users of Fund resources
  - Arrangements during 1991–2000 6/: n.a., 368, 310, 264, 230
  - Arrangements during 1991–2009 7/: n.a., 445, 285, 249, 202
- Notes:
  - 1/ SDR-equivalent rates calculated using SDR basket currency weights.
  - 2/ Difference in yields between a five-year, fixed-rate bond and the 3-month SDR interest rate.
  - 3/ Difference between a five-year, fixed-rate bond and the five-year average 3-month interest rate as implied in futures market contracts (difference adjusted for higher risk premium of instruments in futures markets).
  - 4/ Table reports linear combination of spreads in EMBIG-U.S. dollar and EMBIG-Euro composites, combined using SDR basket weights.
  - 5/ WEO advanced country classification. Five year bond spreads over German bund and US treasury rate calculated using SDR basket weights (normalized to 100).
  - 6/ Median level of combined U.S. dollar-Euro EMBI spread for 8 countries in the EMBI sample that had Fund arrangements in upper credit tranches from January 1991 to December 2000, and no Fund arrangements thereafter, excluding PRGF borrowers.
  - 7/ Median level of combined U.S. dollar-Euro EMBI spread for 16 countries in EMBI sample that had Fund arrangements in upper credit tranches from January 1991 to December 2009, and no Fund arrangements thereafter, excluding PRGF borrowers.
- Source: Bloomberg, JP Morgan and Fund staff calculations.

---

### Annex IV. Assumptions Underlying the Income Projections (selected)
- General assumptions:
  - Figures based on general assumption that investment income is transferred annually to the GRA.
  - Gold profits were transferred to the IA in March 2011. FY 2011 figure is a period average.
  - End-February figure is unannualized.
- FY 2012 selected projections (regular facilities)
  - 1. Purchases (excl. reserve tranche purchases): 22.2, 27.3, 28.8, 27.0
  - 2. Repurchases: 2.0, 2.3, 2.3, 3.3
  - 3. Average balances subject to charges: 51.5, 54.3, 53.9, 83.3
  - 4. Average SDR holdings: 3.5, 3.3, 3.6, 4.3
  - 5. Average remunerated positions: 32.9, 34.4, 33.7, 46.1
  - 6. Average investment account assets - reserves 1/: 6.1, 6.1, 6.1, 6.1
  - 7. Average investment account assets - gold profits 2/: -, -, 1.1, 6.8
  - 8. Average borrowings and issued notes: 12.0, 13.5, 11.8, 29.2
  - Return on investments 3/: 0.65, 1.42, 0.85, 1.3
  - Return on investments - gold profits: -, -, 0.40, 0.8
  - Average interest rates:
    - SDR interest rate and basic rate of remuneration: 0.30, 0.40, 0.30, 0.80
    - Basic rate of charge: 1.30, 1.40, 1.30, 1.80
    - Margin on the rate of charge: 1.00, 1.00, 1.00, 1.00
  - Units: (In billions of SDRs) and (In percent)
- FY 2011 presentation: Actual through end-February 2011; Midyear Projections; Current Projections; Projections.

---

### Annex V. Projected Income and Expenses (FY 2011–2012) (selected, in SDR millions)
- Income Sources (A)
  - Periodic charges, including burden sharing: 569 (Actual to end-Feb 2011), 747 (Mid-year Projections), 723 (Updated Projections), 1,543 (Projections)
  - Interest on SDR holdings: 10, 12, 13, 36
  - Surcharges: 399, 528, 497, 981
  - Investment income: 408, 756, 144, (no explicit projection total in source row formatting)
  - Service charges 1/: 270, 293, 305, 140
  - Reimbursements: 34, 44
  - Total income: 1,291, 1,671, 1,598, 2,848
- Expenses (B)
  - Remuneration, including burden sharing: 891, 261, 214, 53
  - Interest on borrowing and issued notes: 345, 348, 254
  - Administrative expenses 2/: 512, 636, 684, 678
  - Total expenses: 635, 815, 853, 1,385
- Net operational income position (C): 656, 856, 745, 1,463
- Gold profits: 3,100, 2,960, 3,100, 0
- Net income position 3/: 3,756, 3,816, 3,845, 1,463
- Notes:
  - 3/ Net income on the basis presented in the Fund's annual IFRS financial statements.
  - 1/ Includes commitment fees, which are refundable (when disbursements take place) so income arises only if planned disbursements are not made.
  - 2/ Administrative expenses presented on an IFRS basis reflect the actuarially determined IAS 19 expense rather than the periodic funding for the pension plan and post employment benefits.
- Units: (In SDR millions)

*Source: _040711 - 5. Bond yields increase 100 basis points above market forward rates and swap spreads*

### Annex VI. Cumulative Burden Sharing Adjustments by Member as of end-January 2011

### Annex VI. Cumulative Burden Sharing Adjustments by Member as of end-January 2011

### Overview
- Table of cumulative burden sharing adjustments by member, reported in SDR millions, as of end-January 2011.
- Two adjustment categories shown side-by-side: "Adjustments for Deferred Charges" and "Adjustments for SCA-1".
- Values of 0.0 represent amounts of less than SDR 0.1 million; "-" denotes no adjustments.
- 1/ Adjustments to charges and remuneration are billed quarterly.

### Key statistics (aggregate totals reported in the source)
- Adjustments for Deferred Charges: Charges 349.7; Remuneration 349.9; Total 699.6; of total 100.00
- Adjustments for SCA-1: Charges 603.8; Remuneration 583.9; Total 1,187.7; of total 100.00

### Member-level highlights (selected exact entries preserved as in source)
- Albania — Adjustments for Deferred Charges: Charges 0.1; Remuneration 0.0; Total 0.1; of total 0.01. Adjustments for SCA-1: Charges 0.1; Remuneration 0.0; Total 0.1; of total 0.01
- Algeria — Adjustments for Deferred Charges: Charges 7.4; Remuneration 0.4; Total 7.8; of total 1.12. Adjustments for SCA-1: Charges 13.2; Remuneration 0.5; Total 13.6; of total 1.15
- Argentina — Adjustments for Deferred Charges: Charges 31.0; Remuneration -; Total 31.0; of total 4.43. Adjustments for SCA-1: Charges 64.7; Remuneration -; Total 64.7; of total 5.45
- Australia — Adjustments for Deferred Charges: Charges -; Remuneration 2.9; Total 2.9; of total 0.42. Adjustments for SCA-1: Charges -; Remuneration 7.0; Total 7.0; of total 0.59
- Brazil — Adjustments for Deferred Charges: Charges 23.8; Remuneration 0.0; Total 23.8; of total 3.41. Adjustments for SCA-1: Charges 157.4; Remuneration -; Total 157.4; of total 4.83
- Canada — Adjustments for Deferred Charges: Charges -; Remuneration 6.0; Total 6.0; of total 0.86. Adjustments for SCA-1: Charges -; Remuneration 14.3; Total 14.3; of total 1.20
- China — Adjustments for Deferred Charges: Charges 4.0; Remuneration 7.7; Total 11.7; of total 1.68. Adjustments for SCA-1: Charges 83.5; Remuneration 16.2; Total 19.7; of total 1.66
- India — Adjustments for Deferred Charges: Charges 24.0; Remuneration 2.4; Total 26.3; of total 3.77. Adjustments for SCA-1: Charges 28.4; Remuneration 3.4; Total 31.9; of total 2.68
- Japan — Adjustments for Deferred Charges: Charges -; Remuneration 39.7; Total 39.7; of total 5.68. Adjustments for SCA-1: Charges -; Remuneration 64.5; Total 64.5; of total 5.43
- Mexico — Adjustments for Deferred Charges: Charges 38.3; Remuneration 0.7; Total 39.0; of total 5.57. Adjustments for SCA-1: Charges 57.0; Remuneration 1.2; Total 58.2; of total 4.90
- Russian Federation — Adjustments for Deferred Charges: Charges 23.7; Remuneration 0.1; Total 23.9; of total 3.41. Adjustments for SCA-1: Charges 161.9; Remuneration -; Total 61.9; of total 5.21
- Turkey — Adjustments for Deferred Charges: Charges 26.1; Remuneration 0.3; Total 26.4; of total 3.78. Adjustments for SCA-1: Charges 50.9; Remuneration 0.5; Total 51.4; of total 4.33
- United Kingdom — Adjustments for Deferred Charges: Charges -; Remuneration 13.2; Total 13.2; of total 1.88. Adjustments for SCA-1: Charges -; Remuneration 25.8; Total 25.8; of total 2.18
- United States — Adjustments for Deferred Charges: Charges -; Remuneration 101.0; Total 101.0; of total 14.43. Adjustments for SCA-1: Charges -; Remuneration 157.9; Total 157.9; of total 13.30
- Venezuela, R. B. de — Adjustments for Deferred Charges: Charges 15.4; Remuneration 2.1; Total 17.5; of total 2.49. Adjustments for SCA-1: Charges 19.8; Remuneration 2.4; Total 22.2; of total 1.87
- Zimbabwe — Adjustments for Deferred Charges: Charges 0.8; Remuneration -; Total 0.8; of total 0.12. Adjustments for SCA-1: Charges 1.6; Remuneration -; Total 1.6; of total 0.14

(Note: the full table in the source lists every IMF member with the same format: Member — Adjustments for Deferred Charges: Charges; Remuneration; Total; of total — Adjustments for SCA-1: Charges; Remuneration; Total; of total.)

### Notes and definitions
- Figures are reported in SDR millions.
- The source explicitly states: "Values of 0.0 represent amounts of less than SDR 0.1 million; "-" denotes no adjustments."
- Footnote: "1/ Adjustments to charges and remuneration are billed quarterly."

*Annex VI. Cumulative Burden Sharing Adjustments by Member as of end-January 2011 (source content provided)*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_040711.pdf_