Selected Decisions and Selected Documents of the IMF, Thirty- Eighth Issue -- Use of SDRs in Settlement of Financial Obligations

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

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ARTICLE XIX, SECTION 2
Special Drawing Rights: Additional Uses

USE OF SDRS IN SETTLEMENT OF FINANCIAL OBLIGATIONS

  • A. In accordance with Article XIX, Section 2(c), the Fund prescribes that:

    • 1. A participant, by agreement with another participant, may use SDRs to settle a financial obligation to the other participant, if

      • (a) the obligation is denominated in

        • (i) SDRs, or

        • (ii) the currency of a member, or

        • (iii) the currency of a nonmember or another unit of account that is composed of currencies and is applied under an intergovernmental agreement, in respect of which arrangements have been completed for determination by the Fund of equal value in terms of the SDR on the basis of Article XIX, Section 7(a) and Rule O-2; and

      • (b) the amount of SDRs to be used in the settlement of an obligation referred to in (a)(ii) or (a)(iii) above is equal in value, in terms of the SDR, at the time of settlement, to the amount of the obligation.

    • 2. The calculations under 1(b) above shall be made at the exchange rate of the third business day preceding the value date or of the second business day preceding the value date if agreed between the parties.

    • 3. Participants intending to use or acquire SDRs under 1(a) above shall inform the Fund of the denomination and amount of the obligation and the intended value date of the operation. As required by Rule P-7 the lender and the borrower shall declare that the intended use of SDRs will be in accordance with this prescription.

    • 4. Transfers of SDRs under this prescription shall be made only upon the receipt by the Fund of instructions from the transferor and the transferee.

  • B. The Fund shall record operations under this prescription in accordance with Rule P-9.

  • C. The Fund shall review this decision prior to June 30 of each year.

Decision No. 6000-(79/1) S,

December 28, 1978,

as amended by Decision No. 6438-(80/37) S,

March 5, 1980

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