The Case for a General Allocation of SDRs During the Tenth Basic Period

Policy Papers ◽  
2011 ◽  
Vol 2011 (83) ◽  
Author(s):  
Keyword(s):  
International Monetary System ◽  
Periodic Process ◽  
Executive Board ◽  
Monetary System ◽  
Board Of Governors ◽  
Basic Period ◽  
Special Drawing ◽  
Special Drawing Rights

This paper is the outcome of a periodic process regarding the allocation (or cancellation) of Special Drawing Rights (SDRs), and is a report by the Managing Director to the Board of Governors and the Executive Board along with a staff paper that assesses the merits of a general allocation. Following consultations with the Executive Board on the case for a general allocation, the Managing Director decided not to make a proposal for a general SDR allocation at this time. Though there was openness among many Directors to consider a proposal in the upcoming basic period, there was also a widely-shared sense that it would be premature at this stage, owing to ongoing discussions on the role of the SDR in the context of reform of the international monetary system. Decisions by the Fund on a general allocation or cancellation of SDRs take place at regular intervals (or basic periods) of normally five years, with the Managing Director’s report due six months before each new basic period. The tenth basic period begins on January 1, 2012. The report can either propose a general SDR allocation (or cancellation of previous allocations), or conclude that the conditions set out in the IMF’s Articles of Agreement for an allocation or cancellation of SDRs are not currently in place, including broad support among IMF members that participate in the SDR Department. Under the IMF’s Articles of Agreements, the Managing Director may also propose allocations of SDRs at the request of the Board of Governors or the Executive Board. In this regard, an allocation could be considered if there is a long-term global need for reserves that could be usefully filled at least in part by SDRs and if it would not lead to inflationary pressures, assuming there is broad support among IMF members participating in the SDR Department.

Report of the Managing Director to the Board of Governors and to the Executive Board Pursuant to Article XVIII, Section 4©

Policy Papers ◽  
2016 ◽  
Vol 2016 (24) ◽  
Author(s):  
Keyword(s):  
Executive Board ◽  
Board Of Governors ◽  
Basic Period ◽  
Special Drawing ◽  
Special Drawing Rights

This report is submitted pursuant the provisions of the Articles of Agreement relating to a general allocation or cancellation of Special Drawing Rights (SDR). The Articles provide for periodic consideration and decisions on SDR allocations or cancellations in the context of consecutive basic periods of normally five years of duration (Article XVIII, Section 2(a)). The Tenth Basic Period for a general allocation or cancellation of SDRs began on January 1, 2012 and is scheduled to end on December 31, 2016. The Eleventh Basic Period will commence on January 1, 2017.

The “Sanctions” of the International Monetary Fund

1972 ◽  
Vol 66 (4) ◽  
pp. 737-762 ◽  
Author(s):  
Joseph Gold
Keyword(s):  
International Monetary Fund ◽  
International Monetary System ◽  
The United States ◽  
Legal Structure ◽  
Monetary System ◽  
Special Drawing ◽  
Third Stage ◽  
Special Drawing Rights ◽  
Two Stages ◽  
The International Monetary Fund

Recent events in the international monetary system culminating in the decision of the United States, announced on August 15, 1971, to suspend the convertibility of the dollar induce the international lawyer to ask once again what contribution sanctions can make to respect for international law and the effectiveness of multilateral treaties. This question has been a practical problem at two stages in the development of the International Monetary Fund. It arose first during the negotiation and drafting of the original Articles of Agreement which were adopted at the Bretton Woods Conference in July 1944. The second stage was the negotiation and drafting of the amendment of July 28, 1969, which dealt mainly with the legal structure of special drawing rights as a supplement to existing reserve assets. It is now apparent that there will be a third stage, in which a reform of the international monetary system, perhaps in some of its most fundamental aspects, will lead to a further amendment of the Fund's charter.

scholarly journals China and Special Drawing Rights—Towards a Better International Monetary System

2019 ◽  
Vol 12 (2) ◽  
pp. 60 ◽  
Author(s):  
Harrison ◽  
Xiao
Keyword(s):  
Hong Kong ◽  
Current Account ◽  
Current System ◽  
International Monetary System ◽  
Capital Account ◽  
Monetary System ◽  
Special Drawing ◽  
Trading Partners ◽  
Special Drawing Rights ◽  
Rmb Internationalization

China and the international monetary system need each other. The international monetary system is strained, with crisis just around the corner, yet reform is not on anyone’s agenda. Meanwhile China, deeply invested in the current system, faces narrowing options as trading partners question its moves abroad, debt levels rise at home, and its current account moves from surplus to deficit. RMB internationalization might appear to provide a way out, but the policy has its limits and tends to exacerbate rather than relieve tensions. We argue that a tension-reducing solution is at hand to the problems of both the international monetary system and China—IMF-style Special Drawing Rights (SDRs). If in a unilateral initiative China were to make the SDR central to its next phase of capital account opening, China’s institutions, corporates and individuals—presently restricted in their access to international currency—would likely embrace it. Begun by China, with support from the international community and Hong Kong, promulgation of the SDR would usher in an era of lower tensions, providing space for development and avoidance of conflict within a reordered monetary system in which China would have a more prominent role.

scholarly journals By-Laws, Rules and Regulations

2019 ◽  
Author(s):  
Keyword(s):  
Voting Rights ◽  
Executive Board ◽  
Board Of Governors ◽  
Special Drawing ◽  
Special Drawing Rights

This volume sets out the IMF’s By-Laws, which are adopted under the authority of, and are intended to be complementary to, the IMF’s Articles of Agreement, which are considered to prevail in the event of any conflict. The By-Laws cover a number of topics, including the size and composition of the IMF’s Board of Governors and Executive Board, applications for IMF membership, IMF quotas, voting rights, staff regulations, and the IMF’s Special Drawing Rights.

scholarly journals Vers un nouvel équilibre monétaire international : un colloque du 46e congrès de l’ACFAS

2009 ◽  
Vol 55 (1) ◽  
pp. 5-10
Author(s):  
Duncan Cameron ◽  
Maurice Saint-Germain
Keyword(s):  
Multinational Enterprises ◽  
European Monetary System ◽  
Round Table ◽  
Bank Of Canada ◽  
Monetary System ◽  
Special Drawing ◽  
Special Drawing Rights ◽  
The Third World ◽  
The University

International monetary questions were chosen by the economics section of ACFAS as the theme of a round table held at the University of Ottawa in May 1978. This article summarizes the discussions amongst Professors V. Leroy and B. Decaluwé, and the Deputy Governor of the Bank of Canada, Alain Jubinville. Each participant outlined his views on the principal issues: flexible echange rates, intervention policies, and resevre requirements. A question and answer period followed the presentations and the topics raised included the role of multinational enterprises, the plight of the Third World, the significance of the accumulation of petro-dollars, and the effects of a weaker dollar on the international payments system. The article then compares the approaches taken by Professors Decaluwé, Leroy and Cameron in the articles regrouped in this issue of L'Actualité Economique as well as that taken by Professor Nappi in his article in the April-June 1978 issue. In conclusion the questions raised at the colloquium are updated by reference to three new elements which have appeared in the last year: the economic summit in Bonn, the European Monetary System, and the agreed second allocation of Special Drawing Rights.

The Provision of Global Liquidity

2017 ◽  
Author(s):  
José Antonio Ocampo
Keyword(s):  
International Monetary System ◽  
Currency Reserve ◽  
Mixed System ◽  
Asymmetric Adjustment ◽  
Monetary System ◽  
Special Drawing ◽  
Global Liquidity ◽  
Special Drawing Rights ◽  
Alternative Routes ◽  
Reserve System

This chapter starts by analysing three major problems of the current international monetary system: the asymmetric-adjustment problem, dependence on the monetary policy of the main reserve-issuing country, and the large demand for self-insurance by developing countries. It then explores two basic alternatives to reform the system: one route would involve a fully-fledged multi-currency reserve system; the alternative route would be to design an architecture based on the IMF’s Special Drawing Rights (SDRs), the world’s only truly global reserve asset. These two alternative routes could be mixed in a number of ways, and in fact their complementary use may be the only possible way forward. Under such a mixed system, SDRs would become a major global reserve asset and the source of financing for IMF lending, but national/regional currencies would continue to be used as international means of payment and stores of value.

scholarly journals Vers une théorie du système monétaire international

2005 ◽  
Vol 12 (3) ◽  
pp. 475-497 ◽  
Author(s):  
Francis Woehrling
Keyword(s):  
Central Bank ◽  
International Monetary System ◽  
Monetary System ◽  
Regional Markets ◽  
International Currencies ◽  
The One ◽  
Regional Authorities ◽  
Analytical Tools

The idea of an international monetary System comprised of a number of countries (monetary zones) linked together by an exchange rate mechanism controlled by the I.M.F. - the system's center - is the basis of the vast majority of the analyses and reform schemes respecting the System. This idea does not correspond to international economic and monetary reality which is organized around one or several international currencies (or key currencies) with regard to which the Central Bank(s) exercise(s) the de facto role of the System's monetary authority. This fact raises two theoretical questions : How is a Central Bank led to exercise such a role ? How, in fact, does the System function ? It is significant that the textbooks rarely treat the first question other than from an historical perspective. It would nevertheless appear that the explanation for the development of Euromarkefs employs a number of analytical tools that allow for a theoretical framework for the evolution of the I.M.S. based on the idea of competition among financial institutions and banks. On the one hand, this theory anticipates the long-term integration process of markets characterized by the erosion of regional markets and the growth of a new dominant market and therefore by the coexistence of regional authorities and a central authority sharing monetary power. On the other, it advocates the mix of unification and macroeconomic management policies that these authorities must adhere to in order to optimize the process. In the second part of the text the operation of a monetary zone such as the dollar standard of the last thirty years is examined. The organization of that zone provides an example of the distribution of monetary power as between the Federal Reserve System and the central banks of other countries. A consideration of the operation of an International Monetary System having two key currencies completes the study.

Hegemons, IOs, and markets: the case of the substitution account

1984 ◽  
Vol 38 (4) ◽  
pp. 661-683 ◽  
Author(s):  
Joanne Gowa
Keyword(s):  
International Monetary System ◽  
The United States ◽  
International Economy ◽  
Monetary System ◽  
Special Drawing ◽  
Two Factors ◽  
The Stability ◽  
Special Drawing Rights ◽  
Hegemonic Stability ◽  
The International Monetary Fund

For eighteen months between 1978 and 1980, the International Monetary Fund and IMF members attempted to reform the international monetary system by establishing a substitution account. Designed to enhance the stability of the monetary system, the proposed substitution account would have accepted dollar deposits from foreign central banks, in return issuing certificates denominated in special drawing rights. The collapse of negotiations about the account in early 1980 confirms the hypothesis of hegemonic stability theorists that the distribution of systemic costs is problematic in the absence of a hegemonic power. The case thereby qualifies recent assertions that a small group of nations can supply stability to the international economy. However, two factors outside the realm of hegemonic theory also helped produce the outcome of the negotiations: the division of power within the United States between Congress and the Executive, and changes in international market conditions during 1979 and early 1980.

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