Debt and Related Operations 309
Stock Positions and Related Flows with the IMF
A3.79 Th is section briefl y describes the stock po-
sitions and fl ows in countries’ fi nancial assets and li-
abilities arising from membership in the International
Monetary Fund (IMF), as they relate to public sector
debt statistics. Debt data compilers fi rst have to deter-
mine in which public sector unit(s) to record the stock
positions and related fl ows with the IMF. Stock positions
and fl ows in fi nancial assets and liabilities of member
countries with the IMF are usually recorded in the ac-
counts of the public sector unit as determined by the legal
and institutional arrangements in the member country.
A3.80 Th e IMF conducts its dealings with a mem-
ber through the fi scal agency and the depository:
- Each member country designates a fi scal agency
to conduct fi nancial transactions with the IMF
on behalf of the member.^28 - Each member is also required to designate its
central bank as a depository for the IMF’s hold-
ings of the member’s currency.^29 In most mem-
ber countries, the central bank is both the fi scal
agency and the depository.
A3.81 Th e next sections discuss member countries’
quotas in the IMF, their reserve positions in the IMF,
remuneration (interest) receivable from the IMF, the
account that is used for administrative payments (the
“No. 2 Account”), and their Special Drawing Rights
(SDRs) allocations and holdings.
Quotas
A3.82 Member countries are assigned a quota on
joining the IMF. A quota is the capital subscription,
expressed in SDRs, that each member must pay the
IMF on joining and consists of two components:
- Reserve asset component—A member is required
to pay 25 percent of its quota in SDRs or in cur-
rencies specifi ed by the IMF. Th is 25 percent
portion is a component of the member’s reserve
assets and is known as the “reserve tranche.” In
the public sector unit’s accounts, subscribing this
(^28) Th e fi scal agency may be the member’s treasury (ministry of fi -
nance), central bank, offi cial monetary agency, stabilization fund,
or other similar agency. Th e IMF can deal only with, or through,
the designated fi scal agency.
(^29) If the member has no central bank, it shall designate such other
institution as may be acceptable to the IMF.
portion is shown as a transaction involving an
increase in external fi nancial assets in the form
of currency and deposits—that is, the reserve
tranche position, which is a liquid claim on the
IMF (debit), off set by an equal reduction in exist-
ing external fi nancial assets^30 (credit).
- Domestic currency component—Th e remaining
75 percent of the quota is payable in the mem-
ber’s own currency at the designated depository.
Th e payment is made either in domestic cur-
rency (IMF No. 1 Account) or if the member
country so chooses, by issuance of a promis-
sory note (in the IMF Securities Account). Th e
No. 1 Account is used for the IMF’s operational
transactions (e.g., purchases and repurchases),
and small transfers may be made from this ac-
count to the No. 2 Account, which is used for
the payment of local administrative expenses
incurred by the IMF in the member’s curren-
cy.^31 Th e promissory notes are encashable by the
IMF on demand. Th e domestic portion of the
quota payment is not recorded in the public sec-
tor unit’s accounts, because it is considered in
economic terms to be of a contingent nature. No
interest is payable on either the deposit account
or the note.
A3.83 Th ere are periodic reviews of the size of
member quotas. Recording transactions that refl ect a
change in a member’s quota is the same as the record-
ing that takes place when the quota is initially paid.
Reserve position in the IMF
A3.84 A member country’s reserve position in
the IMF equals the sum of the reserve tranche plus
any indebtedness of the IMF (under bilateral loan
agreements, notes, or participation in standing bor-
rowing agreements such as the General Agreements
to Borrow and New Agreements to Borrow) in the
General Resources Account that is readily available to
the member country (for further details, see BMP6,
paragraph 6.85). Th e reserve tranche represents the
member’s unconditional drawing right on the IMF,
created by the foreign exchange portion of the quota
subscription, plus increases (decreases) through the(^30) Th e type of instrument varies.
(^31) When the IMF uses funds from the No. 2 Account to pay for
the acquisition of goods and services, the member country shows
a reduction in this account and an off set transaction in the use of
goods and services.