Selected Decisions and Selected Documents of the IMF, Thirty- Eighth Issue -- Stand-By and Extended Arrangements—Standard Forms

Prepared by the Legal Department of the IMF
As updated as of February 29, 2016

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ARTICLE V, SECTION 3(a), (b), AND (c)
Use of Fund Resources

STAND-BY AND EXTENDED ARRANGEMENTS—STANDARD FORMS

The Executive Board approves the standard forms of stand-by and extended arrangements contained in Attachments A and B to SM/93/207 (9/3/93), and the standard clauses contained in Attachment C to SM/93/207, to be added to those arrangements in cases of requests for (i) a decision on external contingency financing under the compensatory and contingency financing facility in association with an arrangement, or (ii) set-asides in support of operations involving debt reduction.

Decision No. 10464-(93/130),September 13, 1993,

as amended by Decision Nos. 14287-(09/29), March 24, 2009,

effective April 1, 2009,

14407-(09/105), October 26, 2009, and

15113-(12/24), March 14, 2012

Attachment A

Form of Stand-By Arrangement

Attached hereto is a letter [, with annexed memorandum,] dated ____________ from (Minister of Finance and/or Governor of Central Bank) requesting a stand-by arrangement and setting forth:

  • (a) the objectives and policies that the authorities of (member) intend to pursue for the period of this stand-by arrangement;

  • (b) the policies and measures that the authorities of (member) intend to pursue the [first year] of this stand-by arrangement; and

  • (c) understandings of (member) with the Fund regarding [a] review[s] that will be made of progress in realizing the objectives of the program and of the policies and measures that the authorities of (member) will pursue for the remaining period of this stand-by arrangement.

To support these objectives and policies the International Monetary Fund grants this stand-by arrangement in accordance with the following provisions:

  • 1. [For a period of _______ years from ______________] [For the period from ____________ to ________________] (member) will have the right to make purchases from the Fund in an amount equivalent to SDR _________ million, subject to paragraphs 2, 3, 4, and 5 below, without further review by the Fund.

  • 2.

    • (a) Purchases under this stand-by arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR _______ million, provided that purchases shall not exceed the equivalent of SDR _______ million until ____________, and the equivalent of SDR _______ million until ____________.

    • (b) The right of (member) to make purchases during the remaining period of this stand-by arrangement shall be subject to such phasing as shall be determined.

    • (c) None of the limits in (a) or (b) above shall apply to a purchase under this stand-by arrangement that would not increase the Fund’s holdings of (member’s) currency subject to repurchase beyond 25 percent of quota.

  • 3. (Member) will not make purchases under this stand-by arrangement that would increase the Fund’s holdings of (member’s) currency subject to repurchase beyond 25 percent of quota:

    • (a) Subject to paragraph 2 of Decision No. 14407, during any period in which the data at the end of the preceding period indicate that:1

      • (i) [the limit on net international reserves of [Central Bank] described in paragraph ___ of the attached [letter] [memorandum]], or

      • (ii) [the limit on the net domestic borrowing of the public sector described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iii) [the limit on the net domestic assets of the Central Bank described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iv) [these provisions would incorporate other [quantitative or structural] performance criteria monitored at the end of the preceding period]

      [specified in [Tables 1, 2, 3, and 4] [paragraphs ……], respectively, of the [letter] [memorandum] is not observed; or

    • (b) [if at any time during the period of the arrangement] [while]

      • (i) [the limit on the contracting and guaranteeing of external public debt with original maturity of ___ described in paragraph ___ of the attached [letter] [memorandum]], or

      • (ii) [the limit on external payments arrears described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iii) [these provisions would incorporate other [quantitative or structural] performance criteria continuously monitored]

      [specified in [Tables 5, 6, and 7] [paragraphs ___], respectively, of the [letter] [memorandum] is not observed, or

    • (c) after _______ and _______, until the respective review[s] contemplated in paragraph ___ of the attached [letter] [memorandum] is [are] completed, or

    • (d) if at any time during the period of the stand-by arrangement, (member)

      • (i) imposes or intensifies restrictions on the making of payments and transfers for current international transactions, or

      • (ii) introduces or modifies multiple currency practices;2 or

      • (iii) concludes bilateral payments agreements which are inconsistent with Article VIII, or

      • (iv) imposes or intensifies import restrictions for balance of payments reasons.

      When (member) is prevented from purchasing under this stand-by arrangement because of this paragraph 3, purchases will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

  • 4. (Member) will not make purchases under this stand-by arrangement during any period in which (Member): (i) has an overdue financial obligation to the Fund or is failing to meet a repurchase expectation in respect of a noncomplying purchase pursuant to Decision No. 7842-(84/165) on the Guidelines on Corrective Action, or (ii) is failing to meet a repayment obligation to the PRG Trust established by Decision No. 8759-(87/176) PRGT, as amended, or a repayment expectation to that Trust pursuant to the provisions of Appendix I to the PRG Trust Instrument.

  • 5. (Member’s) right to engage in the transactions covered by this stand-by arrangement can be suspended only with respect to requests received by the Fund after (a) a formal ineligibility, or (b) a decision of the Executive Board to suspend transactions, either generally or in order to consider a proposal, made by an Executive Director or the Managing Director, formally to suppress or to limit the eligibility of (member). When notice of a decision of formal ineligibility or of a decision to consider a proposal is given pursuant to this paragraph 5, purchases under this arrangement will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

  • 6. Purchases under this stand-by arrangement shall be made in the currencies of other members selected in accordance with the policies and procedures of the Fund, unless, at the request of (member), the Fund agrees to provide SDRs at the time of the purchase.

  • 7. (Member) shall pay a charge for this stand-by arrangement in accordance with the decisions of the Fund.

  • 8.

    • (a) (Member) shall repurchase the amount of its currency that results from a purchase under this stand-by arrangement in accordance with the provisions of the Articles of Agreement and decisions of the Fund, including those relating to repurchase as (member’s) balance of payments and reserve position improves.

    • (b) Any reductions in (member’s) currency held by the Fund shall reduce the amounts subject to repurchase under (a) above in accordance with the principles applied by the Fund for this purpose at the time of the reduction.

  • 9. During the period of the stand-by arrangement member) shall remain in close consultation with the Fund. These consultations may include correspondence and visits of officials of the Fund to (member) or of representatives of (member) to the Fund. (Member) shall provide the Fund, through reports at intervals or dates requested by the Fund, with such information as the Fund requests in connection with the progress of (member) in achieving the objectives and policies set forth in the attached letter [and annexed memorandum].

  • 10. In accordance with paragraph ____ of the attached letter, (member) will consult the Fund on the adoption of any measures that may be appropriate at the initiative of the government or whenever the Managing Director requests consultation because any of the criteria in paragraph 3 above have not been observed or because the Managing Director considers that consultation on the program is desirable. In addition, after the period of the arrangement and while (member) has outstanding purchases in the upper credit tranches, the government will consult with the Fund from time to time, at the initiative of the government or at the request of the Managing Director, concerning (member’s) balance of payments policies.

Attachment B

Form of Extended Arrangement

Attached hereto is a letter [, with annexed memorandum,] dated _________ from (Minister of Finance and/or Governor of Central Bank) requesting an extended arrangement and setting forth:

  • (a) the objectives and policies that the authorities of (member) intend to pursue for the period of this extended arrangement;

  • (b) the policies and measures that the authorities of (member) intend to pursue during the first year of this extended arrangement; and

  • (c) understandings of (member) with the Fund regarding reviews that will be made of progress in realizing the objectives of the program and of the policies and measures that the authorities of (member) will pursue for the subsequent years of this extended arrangement.

To support these objectives and policies the International Monetary Fund grants this extended arrangement in accordance with the following provisions:

  • 1. For a period of [up to four years] from ____________ (member) will have the right to make purchases from the Fund in an amount equivalent to SDR _________ million, subject to paragraphs 2, 3, 4, and 5 below, without further review by the Fund.

  • 2.

    • (a) Purchases under this extended arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR_____ million until ____________, the equivalent of SDR______ million until ____________, the equivalent of SDR______ million until ____________, and the equivalent of SDR______ million until ____________.

    • (b) Until (end of second year) purchases under this extended arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR __________ million.

    • (c) Until (end of third year) purchases under this extended arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR __________ million.

    • (d) the right of (member) to make purchases during the subsequent years shall be subject to such phasing as shall be determined.

  • 3. (Member) will not make purchases under this extended arrangement:

    • (a) Subject to paragraph 2 of Decision No. 14407, during any period in which the data at the end of the preceding period indicate that:3

      • (i) [the limit on net international reserves of [Central Bank] described in paragraph ___ of the attached [letter] [memorandum]], or

      • (ii) [the limit on net domestic borrowing of the public sector described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iii) [the limit on the net domestic assets of the Central Bank described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iv) [these provisions would incorporate other [quantitative or structural] performance criteria monitored at the end of the preceding period] [specified in [Tables 1, 2, 3 and 4] [paragraphs ____], respectively, of the [letter] [memorandum] is not observed; or

    • (b) [if at any time during the period of the arrangement] [while]

      • (i) [the limit on the contracting or guaranteeing of external public debt with original maturity of ____ described in paragraph ___ of the attached [letter] [memorandum]], or

      • (ii) [the limit on external payments arrears described in paragraph ___ of the attached [letter] [memorandum]], or

      • (iii) [these provisions would incorporate other [quantitative or structural] performance criteria continuously monitored]

      [specified in [Tables 5, 6 and 7] [paragraphs ___], respectively, of the [letter] [memorandum]], is not observed, or

    • (c) after ____ and ____, until the review[s] contemplated in paragraph ___ of the attached [letter] [memorandum] is [are] completed, or

    • (d) if at any time during the period of the extended arrangement, (member)

      • (i) imposes or intensifies restrictions on the making of payments and transfers for current international transactions, or

      • (ii) introduces or modifies multiple currency practices;4 or

      • (iii) concludes bilateral payments agreements which are inconsistent with Article VIII; or

      • (iv) imposes or intensifies import restrictions for balance of payments reasons.

      When (member) is prevented from purchasing under this extended arrangement because of this paragraph 3, purchases will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

  • 4. (Member) will not make purchases under this extended arrangement during any period in which (member): (i) has an overdue financial obligation to the Fund or is failing to meet a repurchase expectation in respect of a noncomplying purchase pursuant to Decision No. 7842-(84/165) on the Guidelines on Corrective Action, or (ii) is failing to meet a repayment obligation to the PRG Trust established by Decision No. 8759-(87/176) PRGT, as amended, or a repayment expectation to that Trust pursuant to the provisions of Appendix I to the PRG Trust Instrument.

  • 5. (Member’s) right to engage in the transactions covered by this extended arrangement can be suspended only with respect to requests received by the Fund after (a) a formal ineligibility, or (b) a decision of the Executive Board to suspend transactions, either generally or in order to consider a proposal, made by an Executive Director or the Managing Director, formally to suppress or to limit the eligibility of (member). When notice of a decision of formal ineligibility or of a decision to consider a proposal is given pursuant to this paragraph 5, purchases under this arrangement will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

  • 6. Purchases under this extended arrangement shall be made in the currencies of other members selected in accordance with the policies and procedures of the Fund, unless, at the request of (member), the Fund agrees to provide SDRs at the time of the purchase.

  • 7. (Member) shall pay a charge for this extended arrangement in accordance with the decisions of the Fund.

  • 8.

    • (a) (Member) shall repurchase the amount of its currency that results from a purchase under this extended arrangement in accordance with the provisions of the Articles of Agreement and decisions of the Fund, including those relating to repurchase as (member’s) balance of payments and reserve position improves.

    • (b) Any reductions in (member’s) currency held by the Fund shall reduce the amounts subject to repurchase under (a) above in accordance with the principles applied by the Fund for this purpose at the time of the reduction.

  • 9. During the period of the extended arrangement (member) shall remain in close consultation with the Fund. These consultations may include correspondence and visits of officials of the Fund to (member) or of representatives of (member) to the Fund. (Member) shall provide the Fund, through reports at intervals or dates requested by the Fund, with such information as the Fund requests in connection with the progress of (member) in achieving the objectives and policies set forth in the attached letter [and annexed memorandum].

  • 10. In accordance with paragraph ___ of the attached letter, (member) will consult with the Fund on the adoption of any measures that may be appropriate at the initiative of the government or whenever the Managing Director requests consultation because any of the criteria in paragraph 3 above have not been observed or because the Managing Director considers that consultation on the program is desirable. In addition, after the period of the arrangement and while (member) has outstanding purchases under this arrangement, the government will consult with the Fund from time to time, at the initiative of the government or at the request of the Managing Director, concerning (member’s) balance of payments policies.

1 Ed. Note: The performance criteria enumerated here are examples only.

2 Ed. Note: As per Decision No. 8648-(87/104), July 17, 1987, the phrase “multiple currency practices” in decisions of the Fund relating to the use of the Fund’s resources does not, except as otherwise provided, include multiple currency practices applying solely to capital transactions.

3 The performance criteria enumerated here are examples only.

4 Ed. Note: As per Decision No. 8648-(87/104), July 17, 1987, the phrase “multiple currency practices” in decisions of the Fund relating to the use of the Fund’s resources does not, except as otherwise provided, include multiple currency practices applying solely to capital transactions.

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