Review of Guidelines for Allocation of Currencies

• 1. Pursuant to Decision No. 11386-(96/107), adopted December 2, 1996, the Fund has reviewed the guidelines for the use of currencies in the General Resources Account approved by Decision No. 10279-(93/19), adopted February 10, 1993. The Executive Board approves the new guidelines set out below:

• 2. Currencies to be used for transfers in the operational budget will be allocated in proportion to members’ quotas.

• 3. Currencies to be used for receipts in the operational budget will be allocated in such a way as to promote over time-balanced positions in the Fund in relation to quotas. Receipts in currencies will be allocated to members with positions in the Fund above the average of all members included in the operational budget. The amount allocated in each currency shall be in proportion to the difference between the member’s position in the Fund and the projected average of all members included in the operational budget, expressed as a percent of quota, at the end of the budget period.

• 4. A member’s “position in the Fund” shall be defined as its reserve tranche position plus any outstanding loans to the Fund by the member or an institution of the member under credit arrangements that are judged by the Fund to provide it, on a continuing basis, with the ability to finance uses of its resources by members on terms comparable to those applicable to the Fund’s use of its currency holdings for this purpose.

• 5. The Fund’s holdings of a member’s currency in terms of quota resulting from allocations of currencies for transfers shall not be reduced below a floor of one-half of the projected average level, in percent of quota, of the Fund’s holdings of usable currencies at the end of the budget period.

• 6. The Fund will seek to maintain adequate working balances of each member’s currency included in the operational budget for transfers of not less than 10 percent of the quotas of these members.

• 7. These guidelines will enter into effect with the operational budget for the period December 1998–February 1999. Their operation will be reported to the Executive Board in the context of the quarterly operational budgets.

• 8. The guidelines will be reviewed by the Executive Board not later than December 31, 2000 (EBS/98/194, 11/17/98).

Decision No. 11837-(98/121),

November 30, 1998