Selected Decisions and Selected Documents of the IMF, Thirty- Eighth Issue -- Article IV Consultation Cycles

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

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ARTICLE IV
Exchange Arrangements and Surveillance

ARTICLE IV CONSULTATION CYCLES

This Decision is adopted pursuant to Article IV, Sections 3 (a) and (b) of the Fund’s Articles. It establishes a framework for the periodicity of consultations between the Fund and each member on the member’s policies under Article IV, Section 1.

  • 1. Except as provided for in paragraphs 2 and 3 below, consultations with members shall be conducted in accordance with the principles set out in this paragraph.

  • In principle, Article IV consultations with members will take place annually. Article IV consultations that take place on the standard twelve-month cycle will be subject to a grace period of 3 months and, accordingly, will be expected to be completed within 15 months of the date of the completion of the most recent consultation.

  • The Fund may decide to place a member on a consultation cycle that is longer than 12 months but, in any event, is not longer than 24 months (hereinafter an “extended cycle”) only if the member does not meet any of the following criteria:

    • (a) the member is of systemic or regional importance;

    • (b) the member is perceived to be at some risk because of policy imbalances or particular threats from exogenous developments, or the member is facing pressing policy issues of broad interest to the Fund membership; or

    • (c) the member has outstanding credit to the Fund under all facilities above one hundred forty-five percent (145%) of the member’s quota.

    The Fund will place a member on an extended cycle only after consulting with the Executive Director for the member and obtaining the member’s consent.

  • 2. Whenever a Fund arrangement (other than an arrangement under the Flexible Credit Line (FCL) or Precautionary and Liquidity Line (PLL)) or a Policy Support Instrument (PSI) is approved for a member, that member shall automatically be placed on a 24-month consultation cycle. Article IV consultations with such members shall be conducted in accordance with the procedures specified below:

    • (a) Article IV consultations with such a member will be expected to be completed within 24 months of the date of completion of the previous Article IV consultation with that member. The consultation cycle will be shortened where a program review under an arrangement for the member is not completed by the date for completion specified in the arrangement: in these circumstances the next Article IV consultation with that member will be expected to be completed by the later of (i) 6 months after the date specified in the arrangement for completion of the review, and (ii) 12 months, plus a grace period of 3 months, after the date of completion of the previous Article IV consultation, provided, however, that, where the relevant program review is completed before the later of the dates specified in (i) and (ii) above, the next Article IV consultation will be expected to be completed within 24 months of the date of completion of the previous Article IV consultation with that member.

    • (b) A member that has completed an arrangement (other than an FCL or PLL arrangement) by drawing all amounts, or a PSI by completing all reviews, shall remain on the cycle determined pursuant to paragraph 2(a) above, unless at the time of the final review under the arrangement or the PSI, the Executive Board determines, based on the criteria specified in paragraph 1, that a different cycle shall apply. Where the arrangement or PSI is cancelled by the member, or the arrangement expires with undrawn amounts or the PSI expires with uncompleted reviews or is terminated, the member concerned shall remain on the cycle determined pursuant to paragraph 2(a) above, unless the Executive Board determines, based on the criteria specified in paragraph 1, that a different cycle will apply.

  • 3. Whenever an FCL or a PLL arrangement is approved for a member, that member will automatically be placed on a 12-month consultation cycle. Article IV consultations with such members will be conducted in accordance with the procedures specified below:

    • (a) if, prior to the approval of the FCL or PLL arrangement, the member was on an extended cycle, the next Article IV consultation with that member will be expected to be completed by the later of (i) 6 months after the date of approval of the arrangement, and (ii) 12 months, plus a grace period of 3 months, after the date of completion of the previous Article IV consultation;

    • (b) if an FCL or a PLL arrangement is completed by drawing all amounts, expires with undrawn amounts, or is cancelled by the member, that member will remain on the standard 12-month cycle, unless the Executive Board determines that a different cycle will apply.

  • 4. At the conclusion of each Article IV consultation with a member, the Fund will specify the cycle that will apply to the next Article IV consultation with the member.

  • 5. Decision No. 12794-(02/76), adopted July 15, 2002, as amended, is hereby repealed. (SM/10/253, 9/21/10)

Decision No. 14747-(10/96), September 28, 2010,

as amended by Decision Nos. 15017-(11/112), November 21, 2011,

and 15945-(16/14), February 17, 2016

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