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}\n {source && (\n\n Implementation of the FY 2021 budget was affected by the onset of\n the COVID-19 crisis following the budget’s formulation. Total net\n administrative expenditures were $1,126 million, or 94.9 percent,\n of the approved structural budget of $1,186 million. The\n underspending relative to the structural budget reflects the\n travel moratorium, the impact of lower building occupancy, and\n IT-related shortfalls. The bulk of travel resources were\n reallocated to support increased crisis staffing, with ramp up\n continuing into FY 2022. Executive Board approval in April 2021 of\n a temporary increase in the general carryforward limit from 5\n percent to 8 percent made a total of $88.4 million in temporary\n resources available for general use to address crisis needs during\n the medium-term budget period.\n
\n\n Externally financed capacity development activities fell by $50\n million in FY 2021 from FY 2020 levels, totaling $118 million\n relative to a $206 million limit. The underspending reflects the\n travel moratorium, as well as capacity constraints in recipient\n countries.\n
\n\n The IMF’s income is generated primarily through its lending and\n investing activities (Figure 3.1). Lending income is derived from\n the charges levied on the use of credit from the General Resources\n Account (GRA), service charges, and commitment fees. In addition,\n the use of IMF credit is subject to surcharges under certain\n circumstances. The IMF income model also relies on investment\n income generated from assets in the Fixed-Income and Endowment\n Subaccounts of the IMF’s Investment Account. Given the public\n nature of the funds, the IMF’s investment policy includes, among\n other things, a careful assessment of acceptable levels of risk as\n well as safeguards to minimize actual or perceived conflicts of\n interest.\n
\n\n\n Reflecting the high levels of lending activities, the IMF’s main\n source of income continues to be{\" \"}\n \n charges\n {\" \"}\n levied on outstanding credit. The basic rate of charge (the\n interest rate) on IMF financing comprises the special drawing\n right (SDR) interest rate plus a fixed margin expressed in basis\n points, as discussed in Part 2. In April 2020, the Executive Board\n set the margin for the rate of charge at 100 basis points for the\n period through April 2022.\n
\n\n The IMF also levies{\" \"}\n \n surcharges\n {\" \"}\n on large amounts of credit. Surcharges apply to amounts of credit\n outstanding that exceed a defined threshold relative to a member’s\n quota (level-based surcharges), and they are higher when this\n threshold has been exceeded for a defined period of time\n (time-based surcharges) (see Table 2.2).\n
\n\n \n In addition to charges and surcharges\n \n , the IMF levies service charges, commitment fees, and special\n charges. A service charge of 0.5 percent is levied on each drawing\n from the GRA. A refundable{\" \"}\n \n commitment fee\n {\" \"}\n is charged at the beginning of each 12-month period on amounts\n available for drawing under GRA arrangements during that period.\n The IMF also levies{\" \"}\n \n special charges\n \n , on charges that are past due, for the first six months that a\n member is in arrears.\n
\n\n\n On the expenditure side, the IMF pays interest (remuneration) to\n members on their creditor positions in the GRA (known as\n remunerated reserve tranche positions). The basic rate of\n remuneration is equal to the SDR interest rate. The IMF also pays\n interest at the SDR interest rate on outstanding borrowing under\n the New Arrangements to Borrow (NAB; see “IMF Financing”).\n
\n\n The rates of charge and remuneration are adjusted under a\n burden-sharing mechanism that distributes the cost of overdue\n financial obligations equally between debtor and creditor members.\n
\n\n\n The IMF’s total comprehensive income in FY 2021 was SDR 4.8\n billion ($6.9 billion), reflecting primarily income from the high\n levels of lending activity, endowment income, and gains stemming\n from the remeasurement of the IMF’s employee benefit plans’ assets\n and liabilities, in accordance with International Financial\n Reporting Standards (International Accounting Standard 19,\n Employee Benefits).\n
\n\n\n Overdue financial obligations to the IMF amounted to SDR 964.3\n million at the end of April 2021 (see Table 3.1). At that time,\n Sudan¹ remained in protracted arrears (outstanding for more than\n six months) to the IMF, dating back to 1984.\n
\n\n\n Under the IMF’s strengthened cooperative strategy on arrears,\n remedial measures have been taken to address the protracted\n arrears. At the end of the financial year, Sudan remained\n ineligible to use IMF resources.\n
\n\n\n The IMF provides financing to its members through three channels,\n all of which serve the common purpose of transferring reserve\n currencies to member countries: regular (nonconcessional) lending\n from the GRA, concessional lending from the PRGT, and the SDR\n Department. The most salient feature of the IMF’s financial\n structure is that it is continuously evolving. The IMF has\n introduced and refined a variety of lending facilities and\n policies over the years to address changing conditions in the\n global economy or the specific needs and circumstances of its\n members.\n
\n\n\n The IMF’s 190 member countries provide resources for loans\n primarily through their payment of{\" \"}\n \n quotas\n \n , which also set their voting rights. Multilateral borrowing and\n bilateral borrowing serve as a second and third line of defense in\n times of crisis. These resources give the IMF access to about $1\n trillion in nonconcessional lending firepower to support members.\n Concessional lending and debt relief for low-income countries is\n financed through separate contribution-based trust funds.\n
\n\n Each member is assigned a quota based broadly on its position in\n the world economy. IMF quotas total SDR 477 billion (about $685\n billion). The value of the SDR, the IMF’s unit of account, is\n based on a basket of currencies (see “Special Drawing Right”).{\" \"}\n
\n\n\n IMF quotas are also reviewed regularly. The 16th General Review of\n Quotas, which is underway, is an opportunity to assess the overall\n adequacy of the quotas as well as the adequacy of their\n distribution among IMF member countries. It will build on\n governance reforms of the 2010 review, including efforts to\n protect quotas and voting shares of the poorest members. The\n current formula for determining quotas, which was agreed upon in\n 2008 and has been used as a guide, is also under review.{\" \"}\n
\n\n\n The conditions for implementing the quota increases agreed upon\n under the 14th General Quota Review were met on January 26, 2016.\n This resulted in a doubling of quota resources, to SDR 477 billion\n (about $685 billion) from about SDR 238.5 billion (about $342.5\n billion). As of April 30, 2021, 185 of the 190 members had made\n their quota payments, accounting for more than 99 percent of the\n total quota increases, and total quotas stood at SDR 476 billion\n (about $683 billion).\n
\n\n\n The{\" \"}\n \n Principality of Andorra joined the IMF\n {\" \"}\n on October 16, 2020, at a ceremony held in Washington, DC.{\" \"}\n
\n\n As noted, the IMF is a quota-based institution. However, borrowed\n resources continue to play a key role in supplementing quota\n resources through the NAB and the bilateral borrowing agreements\n (BBAs), serving respectively as a second and third line of defense\n after quotas.\n
\n\n The NAB are a set of credit arrangements with 38 participants and\n 2 prospective participants. The size of the NAB was doubled to\n about SDR 361 billion on January 1, 2021, and a new NAB period was\n set through the end of 2025. NAB resources can be activated when\n the IMF’s resources need to be supplemented to forestall or cope\n with an impairment of the international monetary system.\n Activation requires the consent of participants representing 85\n percent of total credit arrangements of participants eligible to\n vote and the approval of the Executive Board. The NAB were\n activated 10 times between April 2011 and February 2016, the last\n activation.\n
\n\n\n As noted, BBAs are intended to serve as a third line of defense\n after quotas and the NAB. The current (2020) round of BBAs has\n been in effect since January 1, 2021, with an initial term through\n December 31, 2023, which may be extended by one more year. As of\n April 30, 2021, 40 bilateral creditors have committed under their\n 2020 BBAs to provide the IMF with a total credit amount equivalent\n to about SDR 135 billion. Resources under BBAs can be activated\n only if the amount of the IMF resources otherwise available for\n financing has fallen below a threshold of SDR 100 billion and\n either the NAB is activated or there are no available uncommitted\n NAB resources. Activation of BBAs requires approval by bilateral\n creditors representing 85 percent of the total credit amount\n committed.\n
\n\n\n The{\" \"}\n \n special drawing right\n {\" \"}\n is an international reserve asset created by the IMF in 1969 to\n supplement its member countries’ official reserves. IMF members\n who are participants in the SDR Department (currently all members)\n may exchange SDRs for freely usable currencies. The SDR serves as\n the unit of account of the IMF and some other international\n organizations. The SDR is neither a currency nor a claim on the\n IMF. Rather, it is a potential claim on the freely usable\n currencies of IMF members. SDRs can be exchanged for these\n currencies.{\" \"}\n
\n\n\n The value of the SDR is currently based on a basket of five\n currencies: the US dollar, the euro, the Chinese renminbi, the\n Japanese yen, and the British pound. The currencies included are\n reviewed periodically; the next review of the valuation of the SDR\n basket is scheduled to occur by the end of July 2022.{\" \"}\n
\n\n\n As of April 30, 2021, a total of SDR 204.2 billion (equivalent to\n about $293.2 billion) has been allocated to members so far,\n including SDR 182.6 billion allocated in 2009 in the wake of the\n global financial crisis. At an informal meeting in March 2021, the\n Executive Directors conveyed broad support among IMF members for a\n proposal by the Managing Director for a possible new SDR\n allocation. Once the Executive Board concurs with the Managing\n Director’s proposal, the proposal is submitted to the IMF’s Board\n of Governors, whose decision approving an SDR allocation requires\n support by members representing an 85 percent majority of the\n total voting power.\n
\n