Transactions in Financial Assets and Liabilities 235
assets or liabilities between a resident and a nonresi-
dent unit involves an instrument originally issued by
a resident, an entry in other changes in the volume of
assets (reclassifi cation) should be recorded to main-
tain the integrated GFS framework of fl ows and stock
positions (see also paragraphs 9.85–9.87 and 10.79).
In practice, available information may not permit the
identifi cation of the two parties to the transaction.
Th erefore, transactions recorded in the source data for
external transactions in fi nancial assets and liabilities
may include those that take place not only between
residents and nonresidents but also between two resi-
dents in nonresident fi nancial assets and liabilities.
9.26 In addition to transactions in interest and
principal on debt liabilities, general government and
public sector units may undertake a range of complex
debt-related transactions, such as assuming debt of
other units, making payments on behalf of other units,
debt rescheduling, debt forgiveness, debt defeasance,
and fi nancial leasing. Th e special features of these
types of transactions are described in Appendix 3.
9.27 Th e classifi cation of fi nancial instruments
in GFS, described in this chapter, does not include
functional categories used in the Balance of Payment
and International Investment Position, such as direct
investment, portfolio investment, or international
reserves.^5
Monetary Gold and Special Drawing Rights
(SDRs) (3201, 3211, 3221, 3301, 3321)^6
Monetary gold (32011, 32211)
9.28 Transactions in monetary gold are the exclu-
sive responsibility of the monetary authorities, which
will normally be the central bank (a public fi nancial
corporation). It is possible, however, for a unit of the
general government sector to undertake some mone-
tary functions, in which case it may have transactions
in monetary gold. When transactions in fi nancial as-
sets are classifi ed by residence of the counterparty, the
counterpart liability to transactions in monetary gold
(^5) For information on these categories, see the BPM6, Chapter 6.
See also Appendix 7 for more information on the linkages
between GFS and the Balance of Payments and International
Investment Position.
(^6) Th e numbers in parentheses aft er each classifi cation category are
the GFS classifi cation codes. Appendix 8 provides all classifi cation
codes used in the GFS framework.
is shown as external because monetary gold can be
held only as part of foreign reserves.^7
9.29 Transactions in monetary gold can take place
only between two monetary authorities or between a
monetary authority and an international fi nancial or-
ganization. If the monetary authority adds to its hold-
ings of monetary gold by acquiring newly mined gold
or existing gold off ered on the private market, then
the gold so acquired is said to have been monetized.
No transaction in fi nancial assets should be recorded.
Instead, the acquisition of the gold should fi rst be
recorded as a transaction in nonfi nancial assets, and
then the reclassifi cation of the gold as monetary gold
should be recorded as an other economic fl ow. De-
monetization of gold is recorded symmetrically (see
paragraph 10.84).
9.30 Transactions in nonmonetary gold (including
gold not held as reserves by the monetary authorities
and all gold held by fi nancial institutions other than
the monetary authorities) are treated as acquisitions
minus disposals of valuables (if the sole purpose is to
provide a store of wealth) and otherwise as changes
in inventories. Deposits, loans, and securities denom-
inated in gold are treated as fi nancial assets (not as
gold) denominated in foreign currencies.
Special Drawing Rights (SDRs) (32012,
32112, 32212, 3301, 3321)
9.31 SDRs are held exclusively by participants of
the IMF’s SDR Department and prescribed holders,
and are transferable among them. Th e creation of
SDRs (referred to as allocations of SDRs) and the ex-
tinction of SDRs (cancellations of SDRs) are recorded
as transactions. Transactions in SDRs also take place
when a holder exercises its right to obtain foreign
exchange or other reserve assets from other partici-
pants and prescribed holders and when SDRs are sold,
loaned, or used to settle fi nancial obligations.
9.32 At the time of the SDR allocation, the amounts
recorded as SDR allocations (liabilities) and holdings
(fi nancial assets) are identical and on the same public
sector unit’s balance sheet. Th is public sector unit—
as offi cial holder—may, subsequently, exchange some
or all of its SDR holdings (fi nancial asset) with other
offi cial holders for a freely usable currency(ies) or to
(^7) See paragraphs 7.126–7.130 for more details on monetary gold.