Chapter

Appendix IX. Financial Statements

Author(s):
International Monetary Fund
Published Date:
September 1999
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Report of the External Audit Committee

Washington, DC

June 24, 1999

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have carried out procedures in order to form an opinion on the financial statements of the International Monetary Fund covering the:

  • General Department as at and for the year ended April 30, 1999;
  • SDR Department as at and for the year ended April 30, 1999; and
  • Accounts Administered by the International Monetary Fund as at and for the year ended

April 30, 1999, which consist of the

  • Enhanced Structural Adjustment Facility Trust;
  • Enhanced Structural Adjustment Facility Administered Accounts:
    • — Austria,
    • — Belgium,
    • — Botswana,
    • — Indonesia,
    • — Chile,
    • — Greece,
    • — Islamic Republic of Iran,
    • — Portugal,
    • — Saudi Fund for Development Special Account;
  • ESAF-HIPC Trust, including the Umbrella Account for HIPC Operations;
  • Administered Accounts Established at the Request of Members:
    • — Administered Account Japan,
    • — Administered Account for Selected Fund Activities—Japan,
    • — Framework Administered Account for Technical Assistance Activities,
    • — Administered Account for Rwanda;
  • Trust Fund;
  • Supplementary Financing Facility Subsidy Account; and
  • Retired Staff Benefits Investment Account.

These financial statements are the responsibility of the International Monetary Fund. Our responsibility is to express an opinion on the financial statements based on our procedures.

These included reviews of accounting and internal control systems and an evaluation of the extent and results of tests of the accounting records, which were substantially conducted using an outside accounting firm. In our opinion, the procedures undertaken by us, after reviewing the work performed by the outside accounting firm and the Office of Internal Audit and Inspection, constitute an audit conducted in accordance with generally accepted auditing standards.

Using these standards we planned and performed the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the International Monetary Fund, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Audit Opinion

In our opinion, the financial statements of the General Department, the SDR Department, and the Accounts Administered by the International Monetary Fund, have been prepared in accordance with generally accepted accounting principles as described in Note 1 to each set of financial statements, on a basis consistent with that of the preceding year, and give a true and fair view of their respective financial positions and of the allocations and holdings of Special Drawing Rights as at April 30, 1999, and of the results of operations and transactions during the year then ended.

EXTERNAL AUDIT COMMITTEE

/ s / José Nicolas Agudin, Chairman (Argentina)

/ s / Penny Jones (United Kingdom)

/ s / K.N. Memani (India)

General Department

Balance Sheet as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Assets
General Resources Account
Currencies and securities (Notes 2 and 5)204,966,259144,638,372
SDR holdings (Note 3)3,571,967764,424
Gold holdings (Note 4)3,624,7973,624,797
Charges, interest, and other receivables (Notes 2 and 5)1,683,0911,586,322
Other assets (Note 6)283,918263,920
Total General Resources Account214,130,032150,877,835
Special Disbursement Account
Structural Adjustment Facility loans676,701921,793
Interest receivable6,8036,454
Total Special Disbursement Account683,504928,247
Total Assets214,813,536151,806,082
Quotas, Reserves, Liabilities, and Resources
General Resources Account
Quotas (Note 2)207,982,900145,321,050
Reserves (Note 7)2,569,1102,133,515
Special Contingent Accounts (Note 5)1,990,5631,883,888
Liabilities
Remuneration payable (Note 5)442,257433,730
Other liabilities185,333188,016
627,590621,746
Deferred income (Note 5)959,869917,636
Total General Resources Account214,130,032150,877,835
Special Disbursement Account
Accumulated resources677,606923,107
Deferred income (Note 5)5,8985,140
Total Special Disbursement Account683,504928,247
Total Quotas, Reserves, Liabilities, and Resources214,813,536151,806,082
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statement for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
General Resources Account
Operational Income (Note 5)
Periodic charges2,624,6131,852,807
Interest on SDR holdings69,52437,426
Other charges and income130,64899,650
Burden-sharing contributions, net of refunds (Note 5)
Additional charges74,49273,961
Reduction of remuneration74,69472,928
Deferred income, net of settlements(42,233)(43,071)
2,931,7382,093,701
Operational Expenses
Remuneration (Note 5)1,918,6201,462,905
Allocation to the first Special Contingent Account (Note 5)106,67698,483
Interest on borrowing (Note 8) 78,777
2,104,0731,561,388
Net Operational Income 827,665532,313
Administrative Expenses (Notes 1 and 9) 392,070368,465
Net Income of the General Resources Account 435,595163,848
Special Disbursement Account
Interest and special charges3,1864,531
Net Income of the Special Disbursement Account3,1864,531
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Statement of Changes in Reserves and Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Reserves—General Resources Account
Special Reserve (Note 7)
Balance, beginning of the year1,702,5701,604,087
Net income transferred to the Special Reserve106,67698,483
Balance, end of the year1,809,2461,702,570
General Reserve (Note 7)
Balance, beginning of the year430,945365,580
Net income transferred to the General Reserve 328,91965,365
Balance, end of the year759,864430,945
Total Reserves of the General Resources Account2,569,1102,133,515
Resources—Special Disbursement Account
Balance, beginning of the year923,1071,221,497
Transfers from the Trust Fund439660
Transfers from the Supplementary Financing Facility Subsidy Account239
Net transfers to the ESAF Trust (Note 9)(208,224)(242,592)
Transfers to the ESAF-HIPC Trust (Note 9)(41,141)(60,989)
674,420918,576
Net income 3,1864,531
Total Resources of the Special Disbursement Account677,606923,107
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

General Department

The General Department consists of the General Resources Account, the Special Disbursement Account, and the Investment Account, which had not been activated at April 30, 1999.

General Resources Account

The General Resources Account holds the general resources of the IMF including currencies of the IMF’s member countries, SDR holdings, and gold. These reflect the receipt of quota subscriptions, purchases and repurchases, collection of charges on members’ use of IMF credit, payment of remuneration on members’ creditor positions in the IMF, and borrowing and payment of interest on borrowing.

The IMF makes its resources available to its members in accordance with established policies by selling to members, in exchange for their own currencies, SDRs, or currencies of other members. When members make purchases they incur an obligation to repurchase, within specified periods, the IMF’s holdings of their currencies by payments in SDRs or other currencies determined by the IMF. The IMF’s policies on the use of its general resources are intended to ensure that their use is temporary and will be reversed within the agreed repurchase periods.

The composition of the IMF’s holdings of currencies changes as a result of the IMF’s transactions, including purchases and repurchases. Currencies consist of currency holdings and notes payable on demand, which substitute for the members’ currencies.

A member has a reserve tranche in the IMF to the extent that the IMF’s holdings of its currency, excluding holdings that reflect the member’s use of IMF credit, are less than the member’s quota. A member’s reserve tranche is considered a part of the member’s external reserves, and it may draw on the reserve tranche at any time when it represents that it has a need. Reserve tranche purchases are not considered a use of IMF credit and are not subject to repurchase obligations or charges.

A member is entitled to repurchase at any time the IMF’s holdings of its currency on which the IMF levies charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

Special Disbursement Account

The Special Disbursement Account was activated on June 30, 1981 to receive transfers from the Trust Fund, which is being wound up. The Structural Adjustment Facility (SAF) was established in March 1986 within the Special Disbursement Account to provide balance of payments assistance on concessional terms to qualifying low-income developing country members.

The assets of the account are held separate from resources of other accounts of the General Department. Assets that exceed the needs of the account are transferred to the Reserve Account of the Enhanced Structural Adjustment Facility Trust (ESAF Trust), which is administered separately by the IMF as Trustee. Resources of the ESAF Trust Reserve Account that are determined to be in excess of its estimated needs are to be transferred back to the Special Disbursement Account. Upon liquidation of the ESAF Trust, the amounts remaining in the ESAF Trust Reserve Account after the discharge of all liabilities shall be transferred to the Special Disbursement Account. The IMF has also transferred certain resources derived from the termination of the 1976 Trust Fund to the ESAF Trust Subsidy Account. Upon liquidation of the ESAF Trust, any resources remaining in the ESAF Trust Subsidy Account will be returned to the Special Disbursement Account and the contributors of the ESAF Trust Subsidy Account.

1. Summary of Significant Accounting Practices

The IMF prepares its financial statements in accordance with generally accepted accounting principles that are in compliance with international accounting standards as they apply to the IMF. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

Unit of Account

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

Amounts
CurrencyTo

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of January 1, 19990.4460.228
French franc/euro as of January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

Valuation of Currencies

Each member is obligated to maintain the value of the balances of its currency held by the IMF in the General Resources Account in terms of the SDR. Currencies are valued in terms of the SDR on the basis of the representative exchange rate determined for each currency. Whenever the IMF revalues its holdings of a member’s currency, a receivable or a payable is established for the amount of currency payable by or to the member in order to maintain the SDR value of the IMF’s holdings of the currency. The balances of the receivables or payables are included in the IMF’s total currency holdings.

Income Recognition and Deferral

Income is recognized as it is earned and expenses are recorded as they are incurred, except that income from charges from members that are overdue in settling their obligations to the IMF by six months or more is deferred and is recognized as income only when paid, unless the member has remained current in settling charges when due. The IMF generates compensating income for the amount of charges being deferred through the burden-sharing mechanism (for a more detailed description of this mechanism, see Note 5).

Capital Assets

Land, buildings, and equipment with a cost in excess of $100,000, are capitalized at cost and depreciated using the straight-line method over the estimated useful lives of the assets, ranging from 3 years for equipment to 30 years for buildings.

2. Quotas, Currencies, and Securities

Each member is required to pay to the IMF the amount of its initial quota and subsequent increases partly in its own currency and the remainder in the form of reserve assets, except that in 1978 members were permitted to pay the entire increase in their own currencies. A member’s quota is not increased until the member consents to the increase and pays the subscription. Each member has the option to substitute nonnegotiable and non-interest-bearing securities for the amount of its currency held by the IMF in the General Resources Account that is in excess of ¼ of 1 percent of the member’s quota. These securities, which are part of the IMF’s currency holdings, are encashable by the IMF on demand. The Eleventh General Review of Quotas became effective on January 22, 1999, after members having 85 percent of the total quotas consented to the increase in quotas. When all members will have consented and paid the increase, the quotas of members in the IMF will increase to SDR 212 billion. At April 30, 1999, 156 members had made their quota payments under the Eleventh General Review amounting to SDR 62.7 billion.

Changes in the IMF’s holdings of members’ currencies for the years ended April 30, 1999 and 1998 were as follows:

April 30,

1997
Net

Change
April 30,

1998
Net

Change
April 30,

In millions of SDRs
Members’ quotas145,3192145,32162,662207,983
Quota subscription receivable(2)(2)2
Members’ outstanding use of IMF credit in the GRA34,53915,16249,70110,95060,651
Members’ reserve tranche positions in the GRA(36,103)(14,221)(50,324)(13,286)(63,610)
Other receivables(56)(56)(56)
Administrative currency balances(1)(1)(2)(2)
Currencies and securities143,698940144,63860,328204,966

On December 14, 1992, the Federal Republic of Yugoslavia (Serbia/Montenegro) agreed, as a successor state, to share in the assets and liabilities of the former Socialist Federal Republic of Yugoslavia, but has yet to succeed to IMF membership. IMF credit outstanding with respect to the Federal Republic of Yugoslavia (Serbia/Montenegro), amounted to SDR 56 million at April 30, 1999 and 1998. This amount is included in charges, interest, and other receivables in the balance sheet.

Receivables and payables arising from valuation adjustments at April 30, 1999, when all holdings of currencies of members were last revalued, amounted to SDR 29,185 million and SDR 2,308 million, respectively (SDR 11,250 million and SDR 1,139 million, respectively, at April 30, 1998). At June 18, 1999, the amounts receivable were SDR 25,279 million, and the amounts payable were SDR 2,396 million.

The IMF’s holdings of members’ currencies at April 30, 1999 are shown in Schedule 1.

3. SDR Holdings

SDRs are reserve assets created by the IMF and allocated to members participating in the SDR Department. Although SDRs are not allocated to the IMF, the IMF may acquire, hold, and dispose of SDRs through the General Resources Account. The IMF receives SDRs from members in the settlement of their financial obligations to the IMF and uses SDRs in transactions and operations between the IMF and its members. The IMF earns interest on its SDR holdings at the same rate as all other holders of SDRs.

4. Gold Holdings

The Articles of Agreement limit the use of gold in the IMF’s operations and transactions. Any use provided for in the Articles requires the approval by 85 percent majority of the total voting power of the Executive Board. In accordance with provisions of the Articles, proceeds from the sale of gold in excess of the stipulated valuation, described below, are to be transferred to the Special Disbursement Account, to the Investment Account, or to members that were members on August 31, 1975.

At April 30, 1999 and 1998, the IMF held 3,217,341 kilograms equal to 103,439,916 fine ounces of gold at designated depositories. In accordance with the IMF’s Articles of Agreement, gold is valued on the basis of 0.888671 gram of fine gold per SDR, which is equivalent to SDR 35 per fine ounce (except for 21,396 fine ounces of gold acquired at a market value equivalent to SDR 5.1 million). This valuation is equal to the original cost at which the gold was acquired. As of April 30, 1999, the value of the IMF’s holdings of gold calculated at the market price was SDR 21.9 billion (SDR 23.9 billion at April 30, 1998).

5. IMF Operations

The IMF’s financial resources are made available to members under a number of policies and facilities that differ in the type of balance of payments need they seek to address, in the length of repurchase period, the charges levied on outstanding use of IMF credit, and in the degree of conditionality attached to them. Changes in the outstanding use of IMF credit under the various facilities during the years ended April 30, 1999 and 1998 were as follows:

April 30,

1997
PurchasesRepurchasesApril 30, 1998PurchasesRepurchasesApril 30, 1999
In millions of SDRs
Regular facilities16,5379,0271,10424,4603,5053,43124,534
Extended Fund Facility9,4632,82494811,3395,27281115,800
Supplemental Reserve Facility7,1007,10010,0374,48212,655
Systemic Transformation Facility3,9841153,8695053,364
Enlarged Access3,0469572,0897821,307
Compensatory and Contingency Financing Facility1.3356506852,6004402,845
Supplementary Financing Facility1741515913146
Total34,53918,9513,78949,70121,41410,46460,651

Members’ use of IMF resources is shown in Schedule 1; scheduled repurchases in the General Resources Account and repayments of loans to the Special Disbursement Account are shown in Schedule 3. As of April 30, 1999 and 1998, use of credit in the General Resources Account by the largest users was as follows:

19991998
In million of SDRs and percent of total GRA credit
Largest user of credit12,92321.3%11,20022.5%
Three largest users of credit29,72749.0%28,15156.6%
Five largest users of credit41,85769.0%34,51069.4%

Arrangements in the General Department

At April 30, 1999, the undrawn balances under the 21 arrangements that were in effect in the General Department amounted to SDR 15,929 million (SDR 19,197 million under 27 arrangements at April 30, 1998). These arrangements are listed in Schedule 4.

Charges

The IMF levies periodic charges on its holdings of members’ currencies that derive from their use of IMF credit. The rate of charge is set as a proportion of the SDR interest rate. This rate is adjusted periodically to offset the effect on the IMF’s income of the deferral of unpaid charges and to finance the additions to the first Special Contingent Account, as discussed below. A surcharge progressing from 300 basis points above the rate of charge up to 500 basis points applies to use of credit under the Supplemental Reserve Facility. Special charges are levied on holdings that are not repurchased when due, and on overdue charges that are not settled when due. Special charges do not apply to members that are six months or more overdue to the IMF. A service charge is levied by the IMF on each purchase, except on a reserve tranche purchase. A stand-by fee is charged on Stand-By and Extended Arrangements. This fee is refunded in proportion to purchases made under the arrangement. At April 30, 1999, the total holdings on which the IMF levied charges amounted to SDR 60,651 million (SDR 49,701 million at April 30, 1998). Charges due to the IMF at April 30, 1999 amounted to SDR 1,585 million (SDR 1,521 million at April 30, 1998).

Remuneration

The IMF pays remuneration on a member’s remunerated reserve tranche position. A remunerated reserve tranche position is the amount by which the member’s norm exceeds the IMF’s holdings of its currency, excluding holdings that derive from the use of IMF credit. The norm, which varies for each member, on average amounted to 96.1 percent of quota at April 30, 1999 (94.5 percent of quota at April 30, 1998). The rate of remuneration is equal to the SDR interest rate and is adjusted, subject to a specific floor, to offset the effect of the deferral of charges on income and to finance the additions to the first Special Contingent Account, as discussed below.

At April 30, 1999, total creditor positions on which the IMF paid remuneration amounted to SDR 57,076 million (SDR 44,011 million at April 30, 1998).

Overdue Obligation

At April 30, 1999 and 1998, six members were six months or more overdue in settling their financial obligations to the IMF and four of these members were overdue to the General Department. In addition, the Federal Republic of Yugoslavia (Serbia/Montenegro) was also six months or more overdue in meeting its financial obligations to the IMF. Credit extended to these members and the Federal Republic of Yugoslavia (Serbia/Montenegro) through the General Resources Account and the Special Disbursement Account amounted to SDR 1,144 million as of April 30, 1999 (SDR 1,182 million at April 30, 1998).

GRA repurchases, SAF loan repayments, GRA charges, and SAF interest that are six months or more overdue to the General Department were as follows:

Repurchases:

and SAF Loans
Charges and

SAF interest
1999199819991998
In millions of SDRs
Total overdue1,1351,156956911
Overdue for six months or more1,1261,147934885
Overdue for three years or more1,0611,064814768

The type and duration of these arrears as of April 30, 1999, were as follows:

Repurchases

and SAF

Loans
Charges

and SAF

Interest
Total

Obligation
Longest

Overdue

Obligation
In millions SDRs
Congo, Democratic Republic of292.061.2353.2May 1991
Liberia201.5214.9416.4April 1985
Somalia105.579.1184.6July 1987
Sudan480.0583.71,063.7July 1985
Yugoslavia, Federal Republic of (Serbia/Montenegro)56.117.573.6September 1992
Total1,135.1956.42,091.5

Strengthened Cooperative Strategy

The IMF follows a cooperative strategy aimed at resolving the issue of overdue obligations to the IMF. Three major elements form the basis of the cooperative strategy: (1) preventive measures, (2) remedial and deterrent measures, and (3) intensified collaboration and the rights approach. Under the intensified collaborative approach, the IMF has developed IMF-monitored programs and rights accumulation programs, which permit a member with protracted arrears to the IMF to establish a track record of performance related to policy implementation and payments. A rights accumulation program allows the member to earn rights toward future financing through the implementation of a comprehensive economic program. Rights would be encashed under a successor arrangement after clearance of arrears and when all the requirements for that successor arrangement are met.

Deferred Income and Special Contingent Accouts

It is the policy of the IMF to exclude from current income and record as deferred income charges due by members that are six months or more overdue in meeting payments to the IMF unless the member is current in the payment of charges. Deferred income amounted to SDR 960 million at April 30, 1999 (SDR 918 million at April 30, 1998).

Since May 1, 1986, the IMF has adopted decisions whereby debtor and creditor members share equally the financial consequences of overdue obligations. An amount equal to deferred charges (excluding special charges) is generated and included in the IMF’s income by an adjustment to the rate of charge and the rate of remuneration. These adjustments also finance the accumulation of precautionary balances that are held in the Special Contingent Accounts (see following paragraphs). The proceeds from the subsequent settlement of overdue charges are distributed to members that paid additional charges or received reduced remuneration when and to the extent that deferred charges that gave rise to adjustments are paid.

In view of the existence of protracted overdue obligations, the IMF accumulates precautionary balances, inter alia, in the Special Contingent Accounts. At April 30, 1999, the balances held in the first and second Special Contingent Accounts (SCA-1 and SCA-2) amounted to SDR 1,991 million, of which SDR 991 million was held in the SCA-1 (SDR 884 million at April 30, 1998). The SCA-1 is financed by quarterly adjustments to the rate of charge and the rate of remuneration. Balances in the SCA-1 are to be distributed to the members that share the cost of financing it when there are no outstanding overdue charges and repurchases, or at such earlier time as the IMF may decide.

The SCA-2 was established on July 1, 1990 as part of the strengthened cooperative strategy to accumulate SDR 1.0 billion over a period of approximately five years through a further adjustment to the rate of charge and the rate of remuneration. Financing of the SCA-2 was completed during financial year 1997. The resources accumulated in the SCA-2 safeguard against potential losses arising from purchases made under a successor arrangement after a rights accumulation program has been successfully completed by members with protracted arrears to the IMF at the end of 1989, while at the same time providing additional liquidity to assist in financing such purchases. Refunds of contributions are to be made after all repurchases under the rights approach have been made, or at such earlier date as the IMF may determine. Outstanding credit in the General Resources Account following the completion and encashment of rights accumulation programs amounted to SDR 407 million at April 30, 1999 (SDR 514 million at April 30, 1998).

The adjustments to charges and remuneration for deferred charges and SCA-1 during the years ended April 30, 1999 and 1998 were as follows:

Adjustments toTotal
ChargesRemuneration19991998
In millions of SDRs
Deferred charges22.519.942.448.7
SCA-152.355.1107.499.4
Refunds of deferred charges(0.3)(0.3)(0.6)(1.2)
Burden-sharing contributions, net of refunds74.574.7149.2146.9

The cumulative charges, net of settlements, that have been deferred since May 1, 1986 and have resulted in adjustments to charges and remuneration, amounted to SDR 771 million at April 30, 1999 (SDR 729 million at April 30, 1998). The cumulative refunds for the same period, resulting from the settlements of deferred charges for which burden-sharing adjustments have been made, amounted to SDR 963 million (SDR 962 million at April 30, 1998).

6. Other Assets

Other assets include capital assets which at April 30, 1999 and 1998 amounted to SDR 223 million and SDR 216 million, respectively, and consisted of:

19991998
In millions of SDRs
Land and buildings293.2274.7
Equipment32.329.6
325.5304.3
Less accumulated depreciation102.488.0
223.1216.3

7. Reserves

The IMF determines annually what part of its net income shall be placed to the General Reserve or to the Special Reserve, and what part, if any, shall be distributed. The Articles of Agreement permit the IMF to use the Special Reserve for any purpose for which it may use the General Reserve, except distribution. An administrative deficit for any financial year must be charged first against the Special Reserve. Net operational income generated from the use of resources under the SRF for financial year 1999, after meeting the expenses of conducting the ESAF Trust, has been transferred to the General Reserve.

8. Borrowing

Under the General Arrangements to Borrow (GAB), the IMF may borrow up to SDR 18.5 billion when supplementary resources are needed, in particular, to forestall or to cope with an impairment of the international monetary system. The GAB became effective on October 24, 1962, and has been extended through December 25, 2003. The GAB was activated on July 20, 1998. Interest on borrowing under the GAB is calculated at a rate equal to the SDR interest rate.

Under the New Arrangements to Borrow (NAB), the IMF may borrow up to SDR 34 billion of supplementary resources. The NAB is the facility of first and principal recourse, but it does not replace the GAB which will remain in force. Outstanding drawings and commitments under these two borrowing arrangements are limited to a combined total of SDR 34 billion. The NAB became effective on November 17, 1998 and was activated on December 2, 1998. Interest on borrowing under the NAB is payable to the participants at the SDR interest rate, plus 100 basis points for the first year, augmented by one-third of an increase of 50 basis points for each six-month period thereafter up to a maximum increase of one-third of 200 basis points. As a condition for the activation of the NAB, the IMF will be required to transfer to the ESAF-HIPC Trust an amount equal to 100 basis points above the rate of charge levied on outstanding SRF purchases under the arrangement that was originally financed by the NAB, augmented by one-third of an increase of 50 basis points for each six-month period thereafter up to a maximum increase of one-third of 200 basis points.

During the financial year the IMF borrowed SDR 1,443 million under the GAB and SDR 2,876 million under the NAB; these amounts were repaid in full on March 11, 1999.

9. Administrative Expenses

The administrative expenses for the years ended April 30, 1999 and 1998 were as follows:

19991998
In millions of SDRs
Personnel259.4243.5
Travel54.654.6
Other81.674.8
Less reimbursements for the administration of the SDR Department(3.5)(4.4)
Total administrative expenses, net of reimbursements392.1368.5

The General Resources Account is to be reimbursed annually for expenses incurred in administering the Special Disbursement Account and the ESAF Trust; however, following the establishment of the SRF and the consequent increase in net operational income, the Board decided to forgo reimbursement of the expenses incurred in administering the ESAF Trust for financial years 1998 and 1999 and to transfer the amounts that would otherwise have been reimbursed to the GRA, SDR 41.1 million for financial year 1999 (SDR 40.7 million for financial year 1998), from the ESAF Trust Reserve Account, through the Special Disbursement Account, to the ESAF-HIPC Trust. This amount has been included under Transfers to the ESAF-HIPC Trust in the Statement of Changes in Reserves and Resources.

The IMF has a funded defined-benefit Staff Retirement Plan and a funded defined-benefit Supplemental Retirement Benefits Plan (“the Plans”) covering nearly all staff. Contributions to the Plans and all other assets, liabilities, and income of the Plans are administered separately from the General Department and can be used only for the benefit of the participants in the Plans and their beneficiaries. Participants contribute a fixed percentage of their pensionable remuneration. The IMF contributes the remainder of the cost of funding the Plans and pays certain administrative costs of the Plans. The IMF uses the aggregate cost method for determining its pension cost. Under this method, the IMF’s contributions, including those for cost of living adjustments and for experience gains and losses, are spread over the expected future working lifetimes of the participants in the plans. During financial year 1999, the IMF contributed SDR 15 million to the Plans (SDR 14 million during financial year 1998). This included prepayments amounting to SDR 13 million (SDR 11 million during financial year 1998). As a result, other assets include an amount of SDR 24 million at April 30, 1999 (SDR 11 million at April 30, 1998), arising from the difference between the IMF’s contribution and the amount recognized as pension expense in financial years 1999 and 1998. The funding and cost of the Plans for the year ended April 30, 1999 are based on an actuarial valuation at the beginning of financial year 1998. The results of the valuations, based on the principal actuarial assumptions of an expected rate of return and a discount rate of 8.5 percent and an inflation rate of 5 percent, were as follows:

19991998
In millions of SDRs
Present value of benefits payable2,1701,998
Fair value of plan assets2,2631,895

The IMF will be implementing the provisions of the revised International Accounting Standard IAS 19, Employee Benefits, during FY 2000.

The IMF provides certain health care benefits to retirees that elect to continue participation in its medical benefits and group life insurance plans during retirement. Both participants and the IMF contribute toward meeting the costs of these benefits. The IMF’s cost, which includes a past-service obligation, is actuarially determined using the projected unit credit method; the funding and cost for the year ended April 30, 1999 were based on an actuarial valuation at May 1, 1998. The total liability in this respect was estimated at SDR 146 million at April 30, 1999 (SDR 136 million at April 30, 1998). The IMF has established a Retired Staff Benefits Investment Account to hold and invest the resources contributed by the IMF toward the payment of these benefits. At April 30, 1999, an amount of SDR 147 million was held by that account (SDR 130 million at April 30, 1998).

Schedule 1 Quotas, IMF’s Holdings of Currencies, Reserve Tranche Positions, and Members’ Use of Resources as at April 30, 1999

(In thousands of SDRs)
General Resources Account
IMF’s holdings

of currencies 1
Use of Resources
ReserveGRA2EASF
PercenttrancheAmountPercentSDA3

Trust4Total5
MemberQuotaTotalof quotaposition(A)+ (B)(C) =(D)
Afghanistan, Islamic State of120,400115,48895.94,928
Albania48,70054,175111.23,3558,8250.0141,98350,808
Algeria1,254,7002,515,218200.585,0821,345,5952.221,345,595
Angola286,300286,445100.1
Antigua and Barbuda13,50013,499100.01
Argentina2,117,1005,755,801271.93,638,6726.003,638,672
Armenia, Republic of92,000129,328140.66,13043,4530.0788,425131,878
Australia3,236,4002,083,37264.41,153,168
Austria1,872,3001,068,54757.1803,740
Azerbaijan160,900375,745233.510214,8450.3576,050290,895
Bahamas, The94,90088,66593.46,239
Bahrain135,00074,04554.860,964
Bangladesh533,300631,265118.416398,1250.161,869182,250282,244
Barbados67,50062,82793.14,675
Belarus, Republic of386,400546,575141.520160,1750.26160,175
Belgium3,102,3001,827,51058.91,274,801
Belize18,80014,56277.54,239
Benin61,90059,72196.52,18811,27156,27767,548
Bhutan6,3005,28083.81,020
Bolivia171,500162,63894.88,8754,535174,928179,463
Bosnia and Herzegovina169,100219,857130.050,7530.0850,753
Botswana63,00035,50056.327,506
Brazil3,036,10010,092,023332.47,055,10011.637,055,100
Brunei Darussalam150,000114,75076.535,255
Bulgaria640,2001,413,369220.832,654805,8181.33805,818
Burkina Faso60,20052,99188.07,22117,38060,73078,110
Burundi77,00071,14292.45,86085412,26013,114
Cambodia87,50092,188105.44,6880.0142,00046,688
Cameroon185,700211,323113.845926,0750.04108,080134,155
Canada6,369,2004,151,50165.22,217,757
Cape Verde9,6009,599100.01
Central African Republic55,70055,60699.8961,8248,24010,064
Chad56,00055,71999.52822,75449,56052,314
Chile856,100446,85152.2409,250
China4,687,2002,185,44646.62,501,764
Colombia774,000351,50445.4422,503
Comoros8,9008,36294.05401,8001,800
Congo, Democratic Republic of291,000448,805154.2157,8050.26142,910300,715
Congo, Republic of84,60092,885109.85368,8030.0113,89622,699
Costa Rica164,100144,11387.820,000
Côte d’lvoire325,200324,99299.9215457,344457,344
Croatia, Republic of365,100522,375143.1127157,4000.26157,400
Cyprus139,600104,25274.735,353
Czech Republic819,300819,300100.03
Denmark1,642,800935,90157.0706,902
Djibouti15,90022,072138.81,1007,2720.017,272
Dominica6,0005,99299.99
Dominican Republic218,900258,599118.1339,7000.0739,700
Ecuador302,300322,237106.617,15337,0880.0637,088
Egypt943,700823,65087.3120,075
El Salvador171,300171,303100.0
Equatorial Guinea32,60032,609100.05,9671,3937,360
Eritrea15,90015,900100.05
Estonia, Republic of46,50066,839143.7620,3440.0320,344
Ethiopia133,700126,61194.77,09943,06629,49072,556
Fiji70,30055,38778.814,917
Finland1,263,800722,28957.2541,519
France10,738,5006,752,15962.93,986,383
Gabon154,300227,043147.16672,8020.1272,802
Gambia, The31,10029,61895.21,4852277,0887,315
Georgia150,300221,756147.51071,4560.12138,750210,206
Germany13,008,2007,297,51656.15,710,690
Ghana369,000327,87488.941,13013,292216,767230,059
Greece823,000572,66369.6250,337
Grenada8,5008,501100.0
Guatemala153,800153,806100.0
Guinea107,100107,02699.97588,30988,309
Guinea-Bissau14,20014,200100.0622510,50010,725
Guyana90,90090,902100.021,40282,602104,004
Haiti60,70084,181138.74523,5250.0415,17538,700
Honduras129,500168,375130.08,62547,5000.0891,038138,538
Hungary1,038,400911,40187.8127,001
Iceland117,60099,02984.218,572
India4,158,2003,881,60293.3488,468211,7500.35211,750
Indonesia2,079,3008,726,647419.7145,4746,792,82011.206,792,820
Iran, Islamic Republic of1,497,2001,497,202100.0
Iraq504,000504,013100.0
Ireland838,400480,31557.3358,086
Israel928,200862,69592.965,511
Italy7,055,5004,098,99558.12,956,506
Jamaica273,500345,925126.572,3750.1272,375
Japan13,312,8007,197,79154.16,115,424
Jordan170,500545,418319.92374,9200.62374,920
Kazakhstan, Republic of365,700792,364216.75426,6640.70426,664
Kenya271,400258,99695.412,41716,330119,675136,005
Kiribati5,6005,601100.0
Korea1,633,60011,173,782684.0208,5719,748,75016.079,748,750
Kuwait1,381,1001,050,46576.1330,637
Kyrgyz Republic88,800112,988127.2524,1880.04118,530142,718
Lao People’s Democratic Republic39,10039,100100.08,20434,60342,807
Latvia, Republic of126,800167,975132.5541,1750.0741,175
Lebanon146,000127,16887.118,833
Lesotho34,90031,37289.93,5331,35914,19415,553
Liberia71,300272,738382.528201,4570.33225,1115
Libya1,123,700728,20564.8395,505
Lithuania, Republic of144,200317,980220.516173,7940.29173,794
Luxembourg135,500119,46988.216,049
Macedonia, former Yugoslav Republic of68,900111,135161.342,2330.0727,28169,514
Madagascar122,200122,174100.0277,63632,30139,937
Malawi69,40071,938103.72,2364,7720.014,27856,71765,767
Malaysia1,486,600878,45059.1608,156
Maldives8,2006,64681.01,554
Mali93,30084,52190.68,78211,176129,053140,229
Malta102,00061,74960.540,261
Marshall Islands2,5002,500100.01
Mauritania64,40064,406100.03,06773,58376,650
Mauritius101,60087,14185.814,459
Mexico2,585,8007,922,367306.42445,336,7828.80l—5,336,782
Micronesia, Federated States of3,5003,500100.01
Moldova, Republic of123,200260,400211.45137,2000.23137,200
Mongolia51,10051,100100.0534,31834,318
Morocco588,200517,76188.070,441
Mozambique113,600113,600100.07139,913139,913
Myanmar258,400258,402100.0
Namibia99,60099,566100.037
Nepal71,30065,57792.05,7301,49214,54716,039
Netherlands5,162,4002,989,86357.92,172,540
New Zealand894,600572,65864.0321,957
Nicaragua130,000130,010100.0101,705101,705
Niger65,80057,24087.08,56144650,71851,164
Nigeria1,753,2001,753,181100.068
Norway1,671,700908,69154.4763,038
Oman194,000144,27774.449,796
Pakistan1,033,7001,853,433179.373819,8051.3598,334437,5701,355,709
Palau3,1003,100100.01
Panama206,600317,964153.911,860123,2130.20123,213
Papua New Guinea131,600156,750119.15325,1930.0425,193
Paraguay99,90078,42878.521,475
Peru638,4001,227,391192.3588,9570.97588,957
Philippines879,9002,001,780227.587,1041,208,9701.991,208,970
Poland, Republic of1,369,0001,196,74487.4172,256
Portugal867,400474,66154.7392,755
Qatar190,500164,09886.126,402
Romania1,030,2001,396,739135.6366,5340.60366,534
Russian Federation5,945,40018,867,885317.492612,923,28621.3112,923,286
Rwanda80,100101,687127.021,5690.043,50423,80048,873
St. Kitts and Nevis8,90010,457117.5721,6251,625
St. Lucia15,30015,300100.01
St. Vincent and the Grenadines6,0005,50091.7500
Samoa11,60010,92494.2683
San Marino, Republic of10,0007,65076.52,351
Sao Tome and Principe7,4007,403100.08080
Saudi Arabia6,985,5005,998,02185.9987,483
Senegal161,800160,44599.21,3563,042195,756198,798
Seychelles8,8008,800100.0
Sierra Leone103,700115,265111.22411,5800.0227,02096,848135,448
Singapore862,500537,13562.3325,374
Slovak Republic357,500472,956132.3115,4510.19115,451
Slovenia, Republic of231,700163,18770.468,515
Solomon Islands10,4009,86794.9543
Somalia44,200140,907318.896,7010.168,840112,0045
South Africa1,868,5001,868,405100.0107
Spain3,048,9001,643,36153.91,405,541
Sri Lanka413,400365,72888.547,70020,079212,800232,879
Sudan169,700649,770382.911480,0500.80539,2785
Suriname92,10085,97593.36,125
Swaziland50,70044,15487.16,552
Sweden2,395,5001,432,57959.8962,928
Switzerland3,458,5001,907,86855.21,550,700
Syrian Arab Republic293,600293,603100.05
Tajikistan, Republic of87,000117,000134.5230,0000.0540,30070,300
Tanzania198,900188,93295.09,9754,280211,060215,340
Thailand1,081,9003,481,897321.8202,400,0003.962,400,000
Togo73,40073,14699.72544,41662,94067,356
Tonga6,9005,20675.41,700
Trinidad and Tobago335,600335,585100.016
Tunisia286,500352,762123.120,16786,4240.1486,424
Turkey964,0001,040,041107.9112,775188,8130.31188,813
Turkmenistan, Republic of48,00048,000100.05
Uganda180,500180,507100.01,992266,808268,800
Ukraine1,372,0003,341,372243.571,969,3723.251,969,372
United Arab Emirates392,100202,01351.5190,088
United Kingdom10,738,5006,818,35163.53,920,177
United States37,149,30020,082,77054.117,061,852
Uruguay225,300324,132143.915,375114,2000.19114,200
Uzbekistan, Republic of275,600440,025159.75164,4250.27164,425
Vanuatu17,00014,50685.32,496
Venezuela2,659,1003,179,273119.6321,900842,0711.39842,071
Vietnam329,100358,313108.9529,2130.05241,600270,813
Yemen, Republic of243,500404,865166.313161,3750.27124,000285,375
Yugoslavia, Federal Republic of (Serbia/Montenegro)56,0560.0956,056
Zambia489,100489,101100.018181,750671,681853,431
Zimbabwe353,400494,274139.9252141,1250.24132,450273,575
Total207,982,900204,966,25963,609,74960,650,704100.00676,7015,717,88667,134,639

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies, and outstanding currency valuation adjustments.

Includes the share of the Federal Republic of Yugoslavia (Serbia/Montenegro) in the liabilities of the former Socialist Federal Republic of Yugoslavia, although this state has not succeeded to IMF membership.

The Special Disbursement Account (SDA) of the General Department provides financing under Structural Adjustment Facility (SAF) and Enhanced Structural Adjustment Facility (ESAF) arrangements.

For information purposes only. The ESAF Trust provides financing under ESAF arrangements and is not a part of the General Department.

Includes outstanding Trust Fund loans to Liberia (SDR 23.6 million), Somalia (SDR 6.5 million), and Sudan (SDR 59.2 million).

Less than SDR 500.

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies, and outstanding currency valuation adjustments.

Includes the share of the Federal Republic of Yugoslavia (Serbia/Montenegro) in the liabilities of the former Socialist Federal Republic of Yugoslavia, although this state has not succeeded to IMF membership.

The Special Disbursement Account (SDA) of the General Department provides financing under Structural Adjustment Facility (SAF) and Enhanced Structural Adjustment Facility (ESAF) arrangements.

For information purposes only. The ESAF Trust provides financing under ESAF arrangements and is not a part of the General Department.

Includes outstanding Trust Fund loans to Liberia (SDR 23.6 million), Somalia (SDR 6.5 million), and Sudan (SDR 59.2 million).

Less than SDR 500.

Schedule 2 Financial Resources and Liquidity Position in the General Resources Account as at April 30, 1999 and 1998

(In thousands of SDRs)
19991998
Resources
Currencies and securities204,966,259144,638,372
SDR holdings3,571,967764,424
Gold holdings3,624,7973,624,797
Sundry assets, net of sundry liabilities1379,550310,860
Total resources212,542,573149,338,453
Less: Nonusable Resources2128,833,525102,060,131
Equals: Usable Resources383,709,04847,278,322
Resources Committed and Working Balances
Undrawn balances under arrangements413,059,80215,293,169
Minimum working balances413,922,1609,424,250
Resources committed and working balances26,981,96224,717,419
Net Uncommitted Usable Resources556,727,08622,560,903
Liquid Liabilities
Reserve tranche positions663,609,74950,324,030
Liquidity Ratio789.2%44.8%
Memorandum Item
Resources available under borrowing arrangements34,000,00018,500,000

Sundry assets, net of sundry liabilities reflect current assets (charges, interest, and other receivables) and other assets that include capital assets (land, buildings, and equipment), net of sundry liabilities (remuneration payable and other liabilities).

Resources regarded as nonusable in the financing of the IMF’s ongoing operations and transactions are (1) gold holdings, (2) currencies of members that are using IMF credit, (3) currencies of other members with relatively weak external positions, and (4) sundry assets, net of sundry liabilities.

Usable resources consist of (1) holdings of currencies of members considered by the Executive Board as having balance of payments and reserve positions sufficiently strong for their currencies to be used in transfers, (2) SDR holdings, and (3) any unused amounts under credit lines that have been activated.

Amounts committed under active arrangements, which reflect undrawn balances committed under operative Stand-By and Extended Arrangements, other than precautionary arrangements, are deducted from the total of usable resources, as are one-half of the amounts committed under precautionary arrangements. The Executive Board has decided that minimum working balances be set at 10 percent of the quotas of members deemed sufficiently strong for their currencies to be used in operations and transactions.

Net uncommitted usable resources are defined as usable resources less resources committed under arrangements and minimum working balances, as described above. The amount represents the resources available to meet requests for use of IMF credit under new credit arrangements and for members’ use of their reserve positions in the IMF.

Liquid liabilities consist of (1) members’ reserve tranche positions, and (2) the amount of any outstanding borrowing by the IMF under the GAB or NAB. Both reserve tranche positions and outstanding lending under the GAB and NAB (together called members’ reserve positions in the IMF) are part of members’ international reserves. The IMF cannot challenge a request by a member to draw on its reserve position when developments in its balance of payments or reserve position make this necessary, and the IMF must therefore at all times be in a position to meet such requests.

The liquidity ratio is a measure of the IMF’s liquidity position, represented by the ratio of its net uncommitted usable resources to its liquid liabilities. While this ratio is neither a fixed nor a minimum ratio, historically it has not fallen below 25–30 percent of liquid liabilities for any length of time, thereby ensuring the IMF’s capacity to meet members’ requests.

Sundry assets, net of sundry liabilities reflect current assets (charges, interest, and other receivables) and other assets that include capital assets (land, buildings, and equipment), net of sundry liabilities (remuneration payable and other liabilities).

Resources regarded as nonusable in the financing of the IMF’s ongoing operations and transactions are (1) gold holdings, (2) currencies of members that are using IMF credit, (3) currencies of other members with relatively weak external positions, and (4) sundry assets, net of sundry liabilities.

Usable resources consist of (1) holdings of currencies of members considered by the Executive Board as having balance of payments and reserve positions sufficiently strong for their currencies to be used in transfers, (2) SDR holdings, and (3) any unused amounts under credit lines that have been activated.

Amounts committed under active arrangements, which reflect undrawn balances committed under operative Stand-By and Extended Arrangements, other than precautionary arrangements, are deducted from the total of usable resources, as are one-half of the amounts committed under precautionary arrangements. The Executive Board has decided that minimum working balances be set at 10 percent of the quotas of members deemed sufficiently strong for their currencies to be used in operations and transactions.

Net uncommitted usable resources are defined as usable resources less resources committed under arrangements and minimum working balances, as described above. The amount represents the resources available to meet requests for use of IMF credit under new credit arrangements and for members’ use of their reserve positions in the IMF.

Liquid liabilities consist of (1) members’ reserve tranche positions, and (2) the amount of any outstanding borrowing by the IMF under the GAB or NAB. Both reserve tranche positions and outstanding lending under the GAB and NAB (together called members’ reserve positions in the IMF) are part of members’ international reserves. The IMF cannot challenge a request by a member to draw on its reserve position when developments in its balance of payments or reserve position make this necessary, and the IMF must therefore at all times be in a position to meet such requests.

The liquidity ratio is a measure of the IMF’s liquidity position, represented by the ratio of its net uncommitted usable resources to its liquid liabilities. While this ratio is neither a fixed nor a minimum ratio, historically it has not fallen below 25–30 percent of liquid liabilities for any length of time, thereby ensuring the IMF’s capacity to meet members’ requests.

Schedule 3 Schedule of Repurchases and Repayments of Loans as at April 30, 1999

(In thousands of SDRs)
Financial Year

Ending

April 30
General

Resources

Account1
Special

Disbursement

Account
Overdue992,068143,020
200019,287,182174,357
200110,417,22279,024
20028,984,96590,679
20038,852,99461,863
20044,164,29950,823
20052,398,57740,269
20062,048,60636,666
20071,685,752
20081,196,473
2009622,566
Total60,650,704676,701

A member is entitled to repurchase at any time the IMF’s holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

A member is entitled to repurchase at any time the IMF’s holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

Schedule 4 Status of Arrangements as at April 30, 1999

(In thousands of SDRs)
MemberDate of

Arrangement
ExpirationTotal

Amount

Agreed
Undrawn

Balance
General Resources Account
Stand-By Arrangements
Bosnia and HerzegovinaMay 29, 1998May 28, 199960,60036,360
BrazilDecember 2, 1998December 1, 200113,024,80015,969,700
Cape VerdeFebruary 20, 1998May 31, 19992,1002,100
El SalvadorSeptember 23, 1998February 22, 200037,68037,680
KoreaDecember 4, 1997December 3, 200015,500,0001,268,750
PhilippinesApril 1, 1998March 31, 20001,020,790633,400
ThailandAugust 20, 1997June 19, 20002,900,000500,000
UruguayMarch 29, 1999March 28, 200070,00070,000
ZimbabweJune 1, 1998June 30, 1999130,65091,450
Total Stand-By Arrangements32,746,6208,609,440
Extended Arrangements
ArgentinaFebruary 4, 1998February 3, 20012,080,0002,080,000
AzerbaijanDecember 20, 1996December 19, 199958,50015,800
BulgariaSeptember 25, 1998September 24, 2001627,620470,720
Croatia, Republic ofMarch 12, 1997March 11, 2000353,160324,380
IndonesiaAugust 25, 1998November 5, 20005,383,1002,259,400
JordanApril 15, 1999April 14, 2002127,880117,220
Kazakhstan, Republic ofJuly 17, 1996July 16, 1999309,400154,700
Moldova, Republic ofMay 20, 1996May 19, 2000135,00072,500
PakistanOctober 20, 1997October 19, 2000454,920379,090
PanamaDecember 10, 1997December 9, 2000120,00080,000
UkraineSeptember 4, 1998September 3, 20011,645,5501,288,900
Yemen, Republic ofOctober 29, 1997October 28, 2000105,90076,900
Total Extended Arrangements11,401,0307,319,610
Total General Resources Account44,147,65015,929,050

Includes SDR 9.1 billion available until December 1, 1999 under the Supplemental Reserve Facility.

Includes SDR 9.1 billion available until December 1, 1999 under the Supplemental Reserve Facility.

SDR Department

Statement of Allocations and Holdings as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Allocations
Net cumulative allocations of SDRs21,433,33021,433,330
Overdue charges (Note 2)92,12278,666
Total Allocations21,525,45221,511,996
Holdings
Participants with holdings above allocations
Allocations9,632,62410,457,271
Net receipts of SDRs5,573,0236,731,164
15,205,64717,188,435
Participants with holdings below allocations
Allocations11,800,70610,976,059
Net uses of SDRs9,615,1627,802,687
2,185,5443,173,372
Total holdings of participants17,391,19120,361,807
General Resources Account3,571,967764,424
Holdings of SDRs by prescribed holders562,294385,765
Total Holdings21,525,45221,511,996
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Statement of Receipts and Uses of SDRs for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
ParticipantsGeneral

Resources

Account
Prescribed

Holders
Total
19991998
Total holdings, beginning of the year20,361, 807764,424385,76521,511,99621,497,941
Receipts of SDRs
Transfers among Participants and Prescribed holders
Transactions by agreement13,750,81266,14513,816,9578,566,891
Operations
Loans2,237,8662,237,866
Settlement of financial obligation2,284,21654,9742,339,19086,410
IMF-related operations
SAF and ESAF loans187,829187,829351,745
SAF repayments and interest47,14647,146107,672
Special charges on SAF, ESAF, and Trust Fund116
ESAF contributions and payments39,49 S122,981162,476129,244
ESAF repayments and interest357,778357,778311,285
HIPC contributions and payments51,0001,0051,000
Net interest on SDRs (Note 2)272,15417,088289,242284,256
Transfers from Participants to the ticncral Resources Account
Repurchases4,761,2904,761,2902,917,685
Charges2,805,8082,805,8081,877,315
Quota payments8,643,5528,643,552
Interest on SDRs (Note 2)34,99734,99744,431
Assessment on SDR allocation (Note 2)3,4473,4474,350
Transfers from the General Resources Account to Participants and Prescribed holders
Purchases9,521,8999,521,8994.243,310
Repayments of IMF borrowings1,429,4721,429,472
Interest on IMF borrowings46,10046,100
In exchange for currencies of other members
Acquisitions to pay charges545,022545,02219,952
Remuneration1,825,5131,825,5131,220,129
Other
Refunds and adjustments73,54573,54590,115
Total receipts32,213,92816,249,094667,11349,130,13520,255,796
Uses of SDRs
Transfers among Participants and Prescribed holders
Transactions by agreement13,600,052216,90513,816,9578,566,891
Operations
Loans2,237,8662,237,866
Settlement of financial obligations2,292,83946,3512,339,19086,410
IMF-related operations
SAF and ESAF loans187,829187,829351,745
SAF repayments and interest47,14647,146107,672
Special charges on SAF, ESAF, and Trust Fund116
ESAF contributions and payments122,98239,494162,476129,244
ESAF repayments and interest357,778357,778311.285
HIPC contributions and payments1,00051,0051.000
Transfers from Participants to the General Resources Account
Repurchases4,761,2904,761,2902,917,685
Charges2,805,8082,805,8081,877,315
Quota payments8,643,5528,643,552
Assessment on SDR allocation (Note 2)3,4473,4474,350
Transfers from the General Resources Account to Participants and Prescribed holders
Purchases9,521,8999,521,8994,243,310
Repayments of IMF borrowings1,429,4721,429,472
Interest on IMF borrowings46,10046,100
In exchange for currencies of other members
Acquisitions to pay charges545,022545,02219,952
Remuneration1,825,5131,825,5131,220,129
Other
Refunds and adjustments73,54573,54590,115
Charges paid in the SDR department (Note 2)
Net charges due324,239324,439328,687
Charges not paid when due(16,736)(16,736)(18,335)
Settlement of unpaid charges3,2803,2804,280
Total uses35,184,54413,441,551490,58449,116,67920,241,741
Total holdings, end of the year17,391,1913,571,967562,29421,525,45221,511,996
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

SDR Department

All transactions and operations involving SDRs are conducted through the SDR Department. At April 30, 1999, all members of the IMF were participants in the SDR Department. SDRs are reserve assets allocated by the IMF to members that are participants in the SDR Department in proportion to their quotas in the IMF. Six allocations have been made (in 1970, 1971, 1972, 1979, 1980, and 1981) for a total of SDR 21.4 billion. A proposed amendment of the IMF’s Articles of Agreement has been approved to allow for a special one-time allocation of SDRs equal to 21.4 billion. The amendment will enter into force after three-fifths of the members, having 85 percent of the total voting power, have accepted it. Upon termination of participation or liquidation of the SDR Department, the IMF will provide to holders the currencies received from the participants in settlement of their obligations. The IMF is empowered to prescribe certain official entities as holders of SDRs; at April 30, 1999, 15 institutions had been prescribed as holders. These prescribed holders do not receive allocations.

Uses of SDRs

Participants and prescribed holders can use and receive SDRs in transactions and operations by agreement among themselves. Participants can also use SDRs in operations and transactions involving the General Resources Account, such as the payment of charges and repurchases. The IMF ensures, by designating participants to provide freely usable currency in exchange for SDRs, that a participant can use its SDRs to obtain an equivalent amount of currency if it has a need because of its balance of payments or its reserve position or developments in its reserves.

1. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

Amounts
CurrencyTo

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of January 1, 19990.4460.228
French franc/euro as of January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Interest, Chargesy and Assessment

Interest is paid on holdings of SDRs. Charges are levied on each participant’s net cumulative allocation plus any negative balance of the participant or unpaid charges. Interest on SDR holdings is paid, and charges on net cumulative allocations are collected quarterly. Interest and charges are levied at the same rate and are settled by crediting and debiting individual holdings accounts on the first day of the subsequent quarter. The SDR Department is required to pay interest to each holder, whether or not sufficient SDRs are received to meet the payment of interest. If sufficient SDRs are not received, because charges are overdue, additional SDRs are temporarily created.

At April 30, 1999, charges amounting to SDR 92.1 million were overdue to the SDR Department (SDR 78.7 million at April 30, 1998). At April 30, 1999 and 1998, six members were six months or more overdue in meeting their financial obligations to the IMF, and five of these members were six months or more overdue to the SDR Department. In addition, the Federal Republic of Yugoslavia (Serbia/Montenegro) was also six months or more overdue in meeting its financial obligations. While the Federal Republic of Yugoslavia (Serbia/Montenegro) agreed to its share in the assets and liabilities of the former Socialist Federal Republic of Yugoslavia in the IMF, it had not succeeded to membership in the IMF as of April 30, 1999, and, consequently, it is not a participant in the SDR Department.

Charges due from members and the Federal Republic of Yugoslavia (Serbia/Montenegro) that are six months or more overdue to the SDR Department were as follows:

19991998
In millions of SDRs
Total92.178.7
Overdue for six months or more85.271.3
Overdue for three years or more53.443.8

The amount and duration of arrears were as follows:

TotalLongest Overdue

Obligation
In millions of SDRs
Afghanistan, Islamic State of3.7February 1996
Congo, Democratic Republic of8.1November 1996
Iraq37.1November 1990
Liberia17.9August 1988
Somalia6.9February 1991
Yugoslavia, Federal Republic of (Serbia/Montcengro)18.4November 1992
Total92.1

The rate of interest on the SDR is determined by reference to a combined market interest rate, which is a weighted average of yields or rates on short-term instruments in the capital markets of France, Germany, Japan, the United Kingdom, and the United States. The combined market interest rate used to determine the SDR interest rate is calculated each Friday, using the yields or rates of that day. The SDR interest rate, which is set equal to the combined market interest rate, enters into effect on the following Monday and applies through the following Sunday.

The expenses of conducting the business of the SDR Department are paid by the IMF from the General Resources Account, which is reimbursed in SDRs by the SDR Department at the end of each financial year. For this purpose, the SDR Department levies an assessment on all participants in proportion to their net cumulative allocation.

Enhanced Structural Adjustment Facility Trust

Balance Sheet for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1999
Combined

1998
Assets
Loans receivable5,717,8865,717,8865,269,650
Investments (Notes 2 and 4)303,0012,265,7811,894,5804,463,3624,084,062
Interest receivable12,19742,80518,31573,31779,400
Currencies37744
Accrued account transfers(23,971)69,074(45,103)
Total Assets6,009,1132,377,6971,867,79910,254,6099,433,112
Resources and Liabilities
Resources2,370,6061,728,3824,098,9883,713,696
Borrowing (Note 4)5,951,856137,4836,089,3395,613,451
Interest payable57,1921,93459,12665,265
Other liabilities657,0917,15640,700
Total Resources and Liabilities6,009,1132,377,6971,867,79910,254,6099,433,112
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statement for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1999
Combined

1998
Income
Investment income15890,48878,229168,875157,196
Interest on loans27,05227,05224,124
Exchange valuation gain (loss)24(16)111948
27,23490,47278,240195,946181,368
Expenses
Interest expense199,1202,558201,678186,665
Other expense656538
199,1852,558201,743186,703
Net Income (Loss)(171,951)90,47275,682(5,797)(5,335)
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Statement of Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1999
Combined

1998
Balance, beginning of the year2,089,8141,623,8823,713,6963,332,746
Contributions (Note 3)182,865182,865143,693
Transfers from the Special Disbursement Account249,365249,365303,581
Transfers through the Special
Disbursement Account to the
ESAF-HIPC Trust (Note 6)(41,141)(41,141)(60,989)
Net transfers between:
Loan and Reserve Accounts17,904(17,904)
Loan and Subsidy Accounts154,047(154,047)
Net income (loss)(171,951)90,47275,682(5,797)(5,335)
Balance, end of the year2,370,6061,728,3824,098,9883,713,696
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

The Enhanced Structural Adjustment Facility Trust (“the Trust”), for which the IMF is Trustee, was established in December 1987 and was extended and enlarged in February 1994 to provide loans on concessional terms to qualifying low-income developing country members. The resources of the Trust are separate from the assets of all other accounts of, or administered by, the IMF and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

The operations of the Trust are conducted through a Loan Account, a Reserve Account, and a Subsidy Account.

Loan Account

The resources of the Loan Account consist of the proceeds from borrowing, repayments of principal, and interest payments on loans extended by the Trust. Resources of the Loan Account are committed to qualifying members for a three-year period, upon approval by the Trustee, in support of the member’s macroeconomic and structural adjustment programs. Interest on the outstanding loan balances is currently set at the rate of ½ o f 1 percent a year. At April 30, 1999, loans totaling SDR 5,717.9 million were outstanding (SDR 5,269.6 million at April 30, 1998). Members’ outstanding loans are presented in Schedule 1.

Reserve Account

The Reserve Account consists of amounts transferred by the IMF from the Special Disbursement Account and net earnings from investment of resources held in the Reserve Account and in the Loan Account.

The Resources held in the Reserve Account are to be used by the Trustee, in the event that amounts payable from borrowers’ principal repayments and interest together with the authorized interest subsidy are insufficient to repay loan principal and interest on borrowing of the Loan Account.

Subsidy Account

The resources held in the Subsidy Account consist of donations to the Trust, including transfers of net earnings from ESAF Administered Accounts, SDR 400 million transferred by the IMF from the Special Disbursement Account, net earnings on loans made to the Trust for the Subsidy Account, and the net earnings from investment of Subsidy Account resources.

The resources available in the Subsidy Account are drawn by the Trustee to pay the difference, with respect to each interest period, between the interest due from the borrowers under the Trust and the interest due on Loan Account loans.

1. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

CurrencyAmounts
To

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

Members are not obligated to maintain the SDR value of their currencies held in the accounts of the Trust.

The accounts of the Trust are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Investments

The resources of the Trust are invested pending their use. Investments are denominated in SDRs or in currency and are carried at cost, which does not exceed net realizable value. Pending their investment, resources may be temporarily held in currency, which also may give rise to valuation gains and losses.

3. Contributions

The Trustee accepts contributions for the Subsidy Account on such terms and conditions as agreed between the Trust and the contributor. At April 30, 1999, cumulative contributions received, including transfers from the Special Disbursement Account, amounted to SDR 2,049.6 million (SDR 1,866.7 million at April 30, 1998). Cumulative contributions are listed in Schedule 2.

4. Borrowing

The Trust borrows for the Loan Account and for the Subsidy Account on such terms and conditions as agreed between the Trust and the lenders.

Schedules 3 and 4 present lenders’ borrowing agreements and scheduled repayments of outstanding borrowing, respectively. The following summarizes the borrowing agreements concluded as of April 30, 1999:

Amount

Agreed
Amount

Undrawn
In thousands of SDRs
Loan Account9,498,4032,763,671
Subsidy Account243,4815,998

The Trustee has agreed to hold and invest, on behalf of a lender, principal repayments of Trust borrowing in a suspense account within the Loan Account. Principal repayments will be accumulated until the final maturity of the borrowing, when the full proceeds are to be transferred to the lender. Amounts deposited in this account are invested by the Trustee, and payments of interest to the lender are to be made exclusively from the earnings on the amounts invested.

5. Commitments Under Loan Arrangements

At April 30, 1999, undrawn balances under 35 loan arrangements amounted to SDR 2,156.1 million (SDR 2,164.5 million under 33 arrangements at April 30, 1998). Loan arrangements are listed in Schedule 5. Scheduled repayments of outstanding loans receivable are shown in Schedule 6.

6. Transfers Through the Special Disbursement Account

The expenses of conducting the business of the Trust are paid by the General Resources Account of the IMF and reimbursed through the Special Disbursement Account; corresponding transfers are made from the Reserve Account to the Special Disbursement Account when and to the extent needed. For financial years 1999 and 1998, the Executive Board decided to forgo such reimbursement and to transfer an equivalent amount from the Reserve Account, through the Special Disbursement Account, to the ESAF-HIPC Trust. The amounts transferred for financial years 1999 and 1998 were SDR 41.1 million and SDR 40.7 million, respectively.

Resources of up to SDR 250 million may be transferred, as needed, from the Reserve Account through the Special Disbursement Account to the ESAF-HIPC Trust to be used to provide grant or loans to eligible members under the HIPC initiative. At April 30, 1999, SDR 20.3 million had been transferred for this purpose (SDR 20.3 million at April 30,1998).

Schedule 1 Schedule of Outstanding Loans as at April 30, 1999

(In thousands of SDRs)
MemberESAF Loan AccountStructural

Adjustment Facility1
BalancePercentBalancePercent
Albania41,9830.73
Armenia, Republic of88,4251.55
Azerbaijan76,0501.33
Bangladesh182,2503.191,8690.28
Benin56,2770.9811,2711.67
Bolivia174,9283.064,5350.67
Burkina Faso60,7301.0617,3802.57
Burundi12,2600.218540.13
Cambodia42,0000.73
Cameroon108,0801.89
Central African Republic8,2400.141,8240.27
Chad49,5600.872,7540.41
Comoros1,8000.27
Congo, Democratic Republic of142,91021.13
Congo, Republic of13,8960.24
Côte d’lvoire457,3448.00
Equatorial Guinea1,3930.025,9670.88
Ethiopia29,4900.5243,0666.36
Gambia, The7,0880.122270.03
Georgia138,7502.43
Ghana216,7673.7913,2921.96
Guinea88,3091.54
Guinea-Bissau10,5000.182250.03
Guyana82,6021.4521,4023.16
Haiti15,1750.27
Honduras91,0381.59
Kenya119,6752.0916,3302.41
Kyrgy7, Republic118,5302.07
Lao People’s Democratic Republic34,6030.618,2041.21
Lesotho14,1940.251,3590.20
Macedonia, former Yugoslav Republic of274810.48
Madagascar32,3010.567,6361.13
Malawi56,7170.994.2780.63
Mali129,0532.2611,1761.65
Mauritania73,5831.293,0670.45
Mongolia34,3180.60
Mozambique139,9132.45
Nepal14,5470.251,4920.22
Nicaragua101,7051.78
Niger50.7180.894460.07
Pakistan437,5707.6598,33414.53
Ru and j23,8000.423,5040.52
São Tomé and Príncipe800.01
Senegal195,7563.433,0420.45
Sierra Leone96,8481.6927,0203.99
Somalia8,8401.31
Sri Lanka212,8003.7220,0792.97
Tajikistan, Republic of40,3000.70
Tanzania211,0603.694,2800.63
Togo62,9401.104,4160.65
Uganda266,8084.671,9920.29
Vietnam241,6004.23
Yemen, Republic of124,0002.17
Zambia671,68111.75181,75026.86
Zimbabwe132,4502.32
Total loans outstanding5,717,886100.00676,701100.00

Since Structural Adjustment Facility (SAF) loans have been disbursed in connection with ESAF arrangements, the above list includes these loans, as well as loans disbursed to members under SAF arrangements. These loans are held by the Special Disbursement Account, and repayments of all SAF loans are transferred to the ESAF Reserve Account when received.

Since Structural Adjustment Facility (SAF) loans have been disbursed in connection with ESAF arrangements, the above list includes these loans, as well as loans disbursed to members under SAF arrangements. These loans are held by the Special Disbursement Account, and repayments of all SAF loans are transferred to the ESAF Reserve Account when received.

Schedule 2 Contributions to and Resources of the Subsidy Account as at April 30, 1999

(In thousands of SDRs)
Contributor1Amount
Direct Contributions to the Subsidy Account
Argentina11,333
Australia1,114
Bangladesh235
Canada128,598
China5,000
Czech Republic5,000
Denmark44,419
Egypt5,000
Finland22,684
Germany114,293
Iceland2,400
India3,458
Italy131,280
Japan427,367
Korea29,318
Luxembourg4,468
Morocco3,509
Netherlands73,489
Norway27,164
Sweden110,887
Switzerland16,480
Turkey1,000
United Kingdom264,895
United States89,939
Total direct contributions to the Subsidy Account1,523,330
Net Income Transferred from the ESAF Administered
Accounts
Austria33,141
Belgium65,306
Botswana770
Chile2,156
Greece21,073
Indonesia2,161
Iran, Islamic Republic of495
Portugal1,141
Total net income transferred from the ESAF Administered Accounts126,243
Total contributions received1,649,573
Transfers from the Special Disbursement Account400,000
Total contributions received and transfers from the Special
Disbursement Account2,049,573
Cumulative net income of the Subsidy Account524,261
Resources disbursed to subsidize ESAF Trust lending(845,452)
Total resources of the Subsidy Account1,728,382

In addition to direct contributions, a number of members also make loans available to the Loan Account on concessional terms. See Schedule 3.

In addition to direct contributions, a number of members also make loans available to the Loan Account on concessional terms. See Schedule 3.

Schedule 3 Schedule of Borrowing Agreements as at April 30, 1999

(In thousands of SDRs)
MemberInterest

Rate
Amount of

Agreement
Amount

Drawn
Outstanding

Balance
Loan Account
Prior to enlargement of ESAF
CanadaFixed1300,000300,000257,585
France0.502800,000800,000566,769
GermanyVariable3700,000700,000569,633
ItalyVariable3370,000370,000332,679
JapanVariable32,200,0002,200,0001,841,374
KoreaVariable365,00065,00055,073
NorwayVariable390,00090,00075,260
SpainVariable3220,000216,4294144,544
Switzerland200,000200,00016,205
Total prior to enlargement of ESAF4,945,0004,941,4293,859,122
For enlargement of ESAF
CanadaVariable3200,000121,376121,376
ChinaVariable3100,00068,58068,580
EgyptVariable3100,00067,94367,943
FranceVariable3750,000391,005391,005
GermanyVariable3700,000261,384261,384
ItalyVariable3210,00065,15465,154
JapanVariable32,150,000622,866622,866
KoreaVariable327,7009,0949,094
NorwayVariable360,00029,94529,945
OPEC Fund for International DevelopmentVariable337,003512,78512,785
Spain0.5067,00030,34330,343
SwitzerlandVariable3151,700109,258109,258
Total for enlargement of ESAF4,553,4031,789,7331,789,733
Resources held pending repayment303,0016
Total—Loan Account9,498,4036,731,1625,951,856
Subsidy Account
Malaysia (1994 loans)2.0040,00040,00040,000
Malaysia (1988 and 1989 loans)0.5040,00040,00010,000
Malta0.502,7302,7302,730
Pakistan0.5010,0004,0024,002
Singapore2.0080,00080,00070,000
Thailand2.00760,00060,000
Tunisia0.503,5513,5513,551
UruguayVariable87,2007,2007,200
Total—Subsidy Account243,481237,483137,483

The loans under this agreement are made at market-related rates of interest fixed at the time the loan was disbursed.

The agreement with France made before the enlargement of ESAF (SDR 800 million) provides that the interest rate shall be 0.5 percent on the first SDR 700 million drawn, and for variable, market-related rates of interest thereafter. The agreement with France made for the enlargement of the ESAF (SDR 750 million) provides that the interest rate shall be 0.5 percent until the cumulative implicit interest subsidy reaches SDR 250 million, and at variable, market-related rates of interest thereafter.

The loans under these agreements are made at variable, market-related rates of interest.

The agreement expired with an undrawn balance of SDR 3.6 million.

The agreement with the OPEC Fund for International Development is for an amount of $50 million.

This amount represents principal repayments held and invested on behalf of a lender.

In accordance with the agreement with Thailand, outstanding borrowings were repaid at the the request of Thailand on January 30, 1998.

The interest rate payable on the borrowing from Uruguay is equal to the rate on SDR-denominated deposits less 2.6 percent a year.

The loans under this agreement are made at market-related rates of interest fixed at the time the loan was disbursed.

The agreement with France made before the enlargement of ESAF (SDR 800 million) provides that the interest rate shall be 0.5 percent on the first SDR 700 million drawn, and for variable, market-related rates of interest thereafter. The agreement with France made for the enlargement of the ESAF (SDR 750 million) provides that the interest rate shall be 0.5 percent until the cumulative implicit interest subsidy reaches SDR 250 million, and at variable, market-related rates of interest thereafter.

The loans under these agreements are made at variable, market-related rates of interest.

The agreement expired with an undrawn balance of SDR 3.6 million.

The agreement with the OPEC Fund for International Development is for an amount of $50 million.

This amount represents principal repayments held and invested on behalf of a lender.

In accordance with the agreement with Thailand, outstanding borrowings were repaid at the the request of Thailand on January 30, 1998.

The interest rate payable on the borrowing from Uruguay is equal to the rate on SDR-denominated deposits less 2.6 percent a year.

Schedule 4 Schedule of Repayments of Borrowing as at April 30, 1999

(In thousands of SDRs)
Periods of Repayment,

Financial Year

Ending April 301
Loan

Account1
Subsidy

Account
2000393,07720,000
2001466,53210,000
2002494,96810,000
2003524,0901,365
2004704,176
2005815,35190,751
20061,372,666
2007716,553
2008330,4411,365
2009134,002
20102,668
2014667
2015667
Total5,951,856137,483

Repayment periods are as provided in the borrowing agreements between the Trustee and lenders, including maximum periods for those repayments that are to be held in suspense, as agreed with the lender. See Note 4.

Repayment periods are as provided in the borrowing agreements between the Trustee and lenders, including maximum periods for those repayments that are to be held in suspense, as agreed with the lender. See Note 4.

Schedule 5 Status of Loan Arrangements1 as at April 30, 1999

(In thousands of SDRs)
MemberDate of

Arrangement
ExpirationAmount

Agreed
Undrawn

Balance
AlbaniaMay 13, 1998May 12, 200135,30023,530
Armenia, Republic ofFeb. 14, 1996Dec. 20, 1999109,35020,925
AzerbaijanDec. 20, 1996Jan. 24, 200093,60017,550
BeninAug. 28, 1996Jan. 7, 200027,18014,496
BoliviaSep. 18, 1998Sep. 17, 2001100,96084,134
Burkina FasoJune 14, 1996Sep. 13, 199939,7806,630
CameroonAug. 20, 1997Aug. 19, 2000162,12054,040
Central African RepublicJuly 20, 1998July 19, 200149,44041,200
Congo, Republic ofJune 28, 1996June 27, 199969,48055,584
Côte d’IvoireMar. 17, 1998Mar. 16, 2001285,840161,976
EthiopiaOct. 11, 1996Oct. 22, 199988,47058,980
Gambia, TheJune 29, 1998June 28, 200120,61017,175
GeorgiaFeb. 28, 1996July 26, 1999166,50027,750
GhanaJune 30, 1995June 29, 1999164,40027,400
GuineaJan. 13, 1997Jan. 12, 200070,80023,600
GuyanaJuly 15, 1998July 14, 200153,76044,800
HaitiOct. 18, 1996Oct. 17, 199991,05075,875
HondurasMar. 26, 1999Mar. 25, 2002156,75096,900
Kyrgyz RepublicJune 26, 1998June 25, 200173,38043,000
Macedonia, former Yugoslav Republic ofApr. 11, 1997Apr. 10, 200054,56027,279
MadagascarNov. 27, 1996Nov. 26, 199981,36054,240
MalawiOct. 18, 1995Dec. 16, 199950,9607,635
MaliApr. 10, 1996Aug. 5, 199962,010
MongoliaJuly 30, 1997July 29, 200033,39027,825
MozambiqueJune 21, 1996Aug. 24, 199975,60012,600
NicaraguaMar. 18, 1998Mar. 17,2001148,95567,270
NigerJune 12, 1996Aug. 27, 199957,9609,660
PakistanOct. 20, 1997Oct. 19, 2000682,380417,010
RwandaJune 24, 1998June 23, 200171,40047,600
SenegalApr. 20, 1998Apr. 19, 2001107,01071,340
Tajikistan, Republic ofJune 24, 1998June 23, 2001100,30060,000
TanzaniaNov. 8, 1996Feb. 7, 2000181,59029,380
UgandaNov. 10, 1997Nov. 9, 2000100,42543,518
Yemen, Republic ofOct. 29, 1997Oct. 28, 2000264,750140,750
ZambiaMar. 25, 1999Mar. 24, 2002254,450244,450
4,185,8702,156,102

The Saudi Fund for Development may also provide resources to support arrangements under the ESAF through loans to qualifying members in association with loans under the ESAF. As at April 30, 1999, SDR 49.5 million of such associated loans had been disbursed.

The Saudi Fund for Development may also provide resources to support arrangements under the ESAF through loans to qualifying members in association with loans under the ESAF. As at April 30, 1999, SDR 49.5 million of such associated loans had been disbursed.

Schedule 6 Schedule of Repayments of Loans Receivable as at April 30, 1999

(In thousands of SDRs)
Periods of Repayment,

Financial Year

Ending April 30
Loan

Account
2000461,799
2001511,686
2002680,726
2003722,241
2004834,998
2005842,367
2006730,856
2007468,770
2008330,441
2009134,002
Total5,717,886

Enhanced Structural Adjustment Facility Administered Accounts

Balance Sheets as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19991998199919981999199819991998
Assets
Investments (Note 2)50,00062,000180,000180,0006,8946,89415,00015,000
Interest receivable1171,7363,4431,5215771601557
Advance payments to the
ESAF Subsidy Account855844
Total Assets50,20263,736183,443181,5217,0097,00915,60115,557
Resources and Liabilities
Resources1,4963,2871,365557514
Deposits (Note 3)50,00062,000180,000180,0006,8946,89415,00015,000
Interest payable2022401561561151154443
Total Resources and Liabilities50,20263,736183,443181,5217,0097,00915,60115,557
GreeceIndonesiaIran, I. R. ofPortugal
19991998199919981999199819991998
Assets
Investments (Note 2)35,00042,00025,00025,0005,0004,00010,9558,764
Interest receivable1,1271,334770764414110040
Advance payments to the
ESAF Subsidy Account2
Total Assets36,12743,33425,77025,7645,0414,04111,0558,806
Resources and Liabilities
Resources1,1121,295272286182347
Deposits (Note 3)35,00042,00025,00025,0005,0004,00010,9558,764
Interest payable153949847823185342
Total Resources and Liabilities36,12743,33425,77025,7645,0414,04111,0558,806
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19991998199919981999199819991998
Investment income2,3782,8088,0397,869265287685636
Interest expense on deposits2563359009001381387575
Net Income2,1222,4737,1396,969127149610561
GreeceIndonesiaIran, I. R. ofPortugal
19991998199919981999199819991998
Investment income1,6471,8861,0951,059188163433374
Interest expense on deposits17722359555825205443
Net Income1,4701,663500501163143379331
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statements of Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19991998199919981999199819991998
Balance, beginning of the year1,4964911,365717514327
Net income2,1222,4737,1396,969127149610561
Transfers to the ESAF Trust Subsidy Account(3,618)(1,468)(5,217)(6,321)(127)(149)(567)(374)
Balance, end of the year1,4963,2871,365557514
GreeceIndonesiaIran, I.R. ofPortugal
19991998199919981999199819991998
Balance, beginning of the year1,2954982862315
Net income1,4701,663500501163143379331
Transfers to the ESAF Trust Subsidy Account(1,653)(866)(514)(215)(168)(135)(332)(331)
Balance, end of the year1,1121,295272286182347
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Saudi Fund for Development Special Account Statement of Receipts and Uses of Resources as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Receipts of Resources
49,50049,500
Cumulative repayments of associated loans9,3505,450
Cumulative receipts of interest on associated loans1,3021,082
Accrued interest on associated loans6875
60,22056,107
Uses of Resources
Associated loans (Note 4)49,50049,500
Cumulative repayments to the Saudi Fund for Development9,3505,450
Cumulative payments of interest on transfers1,3021,082
Accrued interest on transfers6875
60,22056,107
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

At the request of certain member countries, the IMF established administered accounts for the benefit of the Subsidy Account of the Enhanced Structural Adjustment Facility Trust (the ESAF Trust). The administered accounts comprise deposits made by contributors. The difference between interest earned by the administered accounts and the interest payable on deposits is transferred to the Subsidy Account of the ESAF Trust.

The Saudi Fund for Development (SFD) Special Account was established at the request of the SFD to provide supplementary finance in association with loans under the Enhanced Structural Adjustment Facility (ESAF). The IMF acts as agent of the SFD. Disbursements from the SFD Special Account are made simultaneously with ESAF disbursements. Payments of interest and principal due to the SFD under associated loans are to be transferred to the SFD.

The resources of each administered account are separate from the assets of all other accounts of, or administered by, the IMF and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

CurrencyAmounts
To

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

The administered accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Investments

The resources of each administered account are invested in SDR-denominated deposits and valued at cost, which approximates market value.

3. Deposits

The Administered Account Austria was established on December 27, 1988 for the administration of resources deposited in the account by the Austrian National Bank. Two deposits (one of SDR 60.0 million made on December 30, 1988, and one of SDR 50.0 million made on August 10, 1995) are to be repaid in ten equal semiannual installments beginning five and a half years after the date of each deposit and ending at the end of the tenth year after the date of each deposit. The deposits bear interest at a rate of ½ of 1 percent a year. The first deposit from Austria had been repaid in full as of April 30, 1999.

The Administered Account Belgium was established on July 27, 1988 for the administration of resources deposited in the account by the National Bank of Belgium. Four deposits (SDR 30.0 million made on July 29, 1988; SDR 35.0 million made on December 30, 1988; SDR 35.0 million made on June 30, 1989; and SDR 80.0 million made on April 29, 1994) have an initial maturity of six months and are renewable by the IMF, on the same basis. The final maturity of each deposit, including renewals, will be ten years from the initial date of the individual deposits. The deposits bear interest at a rate of ½ of 1 percent a year. In accordance with an addendum to the account, effective as of July 24, 1998, the maturities of the first three deposits will be extended by the National Bank of Belgium, for further periods of six months, provided that the total maturity period of each deposit does not exceed five years. The deposits shall be invested by the IMF, and the IMF shall pay the National Bank of Belgium interest on each deposit at an annual rate of ½ of 1 percent. The difference between the interest paid to the National Bank of Belgium and the interest earned on the deposits (net of any cost to the IMF) shall be retained in the account and invested, pending further disposition by the National Bank of Belgium.

The Administered Account Botswana was established on July 1, 1994 for the administration of resources deposited in the account by the Bank of Botswana. The deposit, totaling SDR 6.9 million, is to be repaid in one installment ten years after the date of deposit. The deposit bears interest at a rate of 2 percent a year.

The Administered Account Chile was established on October 4, 1994 for the administration of resources deposited in the account by the Banco Central de Chile. The deposit, totaling SDR 15.0 million, is to be repaid in one installment ten years after the date of deposit. The deposit bears interest at a rate of ½ of 1 percent a year.

The Administered Account Greece was established on November 30, 1988 for the administration of resources deposited in the account by the Bank of Greece. Two deposits of SDR 35.0 million each (December 15, 1988 and April 29, 1994), are to be repaid in ten equal semiannual installments beginning five and a half years after the date of deposit and will be completed at the end of the tenth year after the date of the deposits. The deposits bear interest at a rate of ½ of 1 percent a year. The first deposit from Greece had been repaid in full as of April 30, 1999.

The Administered Account Indonesia was established on June 30, 1994 for the administration of resources deposited in the account by the Bank Indonesia. The deposit, totaling SDR 25.0 million, is to be repaid in one installment ten years after the date the deposit was made. The interest payable on the deposit is equivalent to that obtained for the investment of the deposit less 2 percent a year.

The Administered Account Islamic Republic of Iran was established on June 6, 1994 for the administration of resources deposited in the account by the Central Bank of the Islamic Republic of Iran (CBIRI). The CBIRI has made five annual deposits, each of SDR 1.0 million. All of the deposits will be repaid at the end of ten years after the date of the first deposit. Each deposit bears interest at a rate of ½ of 1 percent a year.

The Administered Account Portugal was established on May 16, 1994 for the administration of resources deposited in the account by the Banco de Portugal (BdP). The BdP has agreed to make six annual deposits, each of SDR 2.2 million. Each deposit is to be repaid in five equal annual installments beginning six years after the date of the deposit and will be completed at the end of the tenth year after the date of the deposit. Each deposit bears interest at a rate of ½ of 1 percent a year.

4. Associated Loans

The SFD has provided resources to support arrangements under the ESAF through loans in association with loans under the ESAF. Funds become available under an associated loan after a bilateral agreement between the SFD and the recipient country has been effected. Amounts denominated in SDRs, for disbursement to a recipient country under an associated loan, are placed by the SFD in the Special Account for disbursement by the IMF simultaneously with disbursements under an ESAF arrangement. These loans are repayable in ten equal semiannual installments commencing not later than the end of the first six months of the sixth year, and are to be completed at the end of the tenth year after the date of disbursement. Interest on the outstanding balance is currently set at a rate of ½ of 1 percent a year.

ESAF-HIPC Trust

Balance Sheet as at April 30, 1999 and 1998

(In thousands of SDRs(Note 1)
ESAF-HIPC

Trust Account
Umbrella

Account

for HIPC

Operations
Combined

1999
Combined

1998
Assets
Investments (Note 2)119,29757,822177,11970,750
Transfer receivable (Note 3)20,37720,37740,700
Interest receivable1,9339392,872149
Total Assets141,60758,761200,368111,599
Resources and Liabilities
Resources99,65158,761158,41295,987
Deposits (Note 4)41,60741,60715,607
Interest payable3493495
Total Resources and Liabilities141,60758,761200,368111,599
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statement and Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
ESAF-HIPC

Trust Account
Umbrella

Account

for HIPC

Operations
Combined

1999
Combined

1998
Balance, beginning of the year44,37451,61395,9872,277
Transfers (Note 3)54,42854,42860,989
Contributions received (Note 3)19,10821,24940,35783,442
HIPC grants (Note 5)(21,249)(21,249)(51,514)
Disbursements (Note 5)(16,570)(16,570)
Income earned on investments (Note 2)3,6322,4696,1011,090
Interest expense on deposits (Note 4)(642)(642)(297)
Net changes in resources55,2777,14862,42593,710
Balance, end of the year99,65158,761158,41295,987
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

The Trust for Special ESAF Operations for the Heavily Indebted Poor Countries and for Interim ESAF Subsidy Operations (“the ESAF-HIPC Trust”), for which the IMF is Trustee, was established on February 4, 1997 to provide balance of payments assistance to low-income developing members by making grants and loans to eligible members for the purpose of reducing their external debt burden and for interim ESAF subsidy purposes. The resources of the ESAFHIPC Trust are separate from the assets of all other accounts of, or administered by, the IMF and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

The operations of the ESAF-HIPC Trust are conducted through the ESAF-HIPC Trust Account and the Umbrella Account for HIPC Operations.

ESAF-HIPC Trust Account

The resources of the ESAF-HIPC Trust Account consist of grant contributions, deposits, loans, and other types of investments made by contributors; amounts transferred by the IMF from the Special Disbursement Account and the General Resources Account; and net earnings from investment of resources held in the ESAF-HIPC Trust Account.

The resources held in the ESAF-HIPC Trust Account are to be used by the Trustee to make grants or loans to eligible members that qualify for assistance under the HIPC Initiative and for subsidizing the interest rate on interim ESAF operations to ESAF-eligible members.

Umbrella Account for HIPC Operations

The Umbrella Account for HIPC Operations (“the Umbrella Account”) receives and administers the proceeds of grants or loans made to eligible members that qualify for assistance under the terms of the ESAF-HIPC Trust. Within the Umbrella Account, resources received are administered through the establishment of subaccounts for each eligible member upon the approval of a disbursement under the ESAF-HIPC Trust.

The resources of a subaccount of the Umbrella Account consist of (i) amounts disbursed from the ESAF-HIPC Trust Account as grants or loans for the benefit of a member, and (ii) net earnings from investment of the resources held in the subaccount.

The resources held in a subaccount of the Umbrella Account are to be used to meet the member’s debt obligations to the IMF in accordance with the schedule agreed upon by the Trustee and the member for the use of the proceeds of the ESAF-HIPC disbursements.

1. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

CurrencyAmounts
To

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

Members are not obligated to maintain the SDR value of their currencies held in the accounts of the ESAF-HIPC Trust.

The accounts of the ESAF-HIPC Trust are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Investments

The resources of the ESAF-HIPC Trust are invested pending their use. Investments are denominated in SDRs or in currency and are carried at cost, which does not exceed net realizable value. Pending their investment, resources may be temporarily held in currency, which also may give rise to valuation gains and losses.

3. Contributions and Transfers

ESAF-HIPC Trust Account

The Trustee accepts contributions of resources on such terms and conditions as agreed between the ESAF-HIPC Trust and the contributor. At April 30, 1999, six contributions amounting to SDR 53.3 million had been received (four contributions amounting to SDR 34.2 million at April 30, 1998): SDR 2.3 million from Finland; SDR 1.1 million from Nigeria; SDR 27.2 million and SDR 19.1 million, respectively, from Japan; SDR 3.6 million from the Netherlands; and SDR 20,000 from Belize. The contribution from the Netherlands is earmarked for interim ESAF subsidy operations.

Total transfers from the ESAF Trust Reserve Account through the Special Disbursement Account amounted to SDR 102.1 million at April 30, 1999 (SDR 61.0 million at April 30, 1998). At April 30, 1999, there was a transfer due from the General Resources Account amounting to SDR 13.3 million (no transfers had been made at April 30, 1998).

Umbrella Account

The Umbrella Account receives the proceeds of grants or loans disbursed by the ESAF-HIPC Trust on behalf of an eligible member. Two grants amounting to SDR 51.5 million and SDR 21.2 million had been received on behalf of Uganda and Bolivia, respectively, at April 30, 1999 (one grant of SDR 51.5 million at April 30, 1998).

4. Deposits

ESAF-HIPC Trust Account

The Trustee accepts deposits, loans, and other types of investments made by contributors to the ESAF-HIPC Trust on such terms and conditions as agreed between the ESAFHIPC Trust and the Contributor. At April 30, 1999, five deposits amounting to SDR 41.6 million had been received by the ESAF-HIPC Trust Account (two deposits amounting to SDR 15.6 million at April 30, 1998). The first deposit of SDR 14.6 million bears interest at a rate of 2 percent a year and is to be repaid in one installment five years after the date of deposit, made on April 30, 1997. Two deposits of SDR 1 million each, which bear interest at a rate of ½ of 1 percent a year and are to be repaid in one installment ten years after the date of the initial deposit, were made on May 30, 1997 and May 30, 1998, respectively. The fourth and fifth deposits of SDR 15 million and SDR 10 million, respectively, bear interest at a rate of 2 percent a year and are to be repaid in one installment ten years after the date of the deposit, made on June 29, 1998 and November 20, 1998, respectively.

5. Disbursements

ESAF-HIPC Trust Account

The proceeds of grants or loans made on behalf of an eligible member will be paid in a single disbursement to the Umbrella Account for the benefit of that member. Resources needed for interim ESAF subsidy operations will be drawn by the Trustee as needed. At April 30, 1999, two disbursements of SDR 51.5 million and SDR 21.2 million had been made to the Umbrella Account for the benefit of Uganda and Bolivia, respectively (one disbursement of SDR 51.5 million at April 30, 1998).

Umbrella Account

The resources of a subaccount within the Umbrella Account, including any income from investments, shall be used to meet the member’s debt-service payments on its existing debt to the IMF as they fall due in accordance with the schedule agreed upon by the Trustee and the member. At April 30, 1999, disbursements of SDR 9.8 million and SDR 6.8 million had been made from the subaccounts of Uganda and Bolivia, respectively, in accordance with the agreed schedules (no disbursements had been made at April 30, 1998).

Administered Accounts Established at the Request of Members

Balance Sheets as at April 30, 1999 and 1998

(Note 1)
Administered

Account Japan
Administered

Account for

Selected Fund

Activities—Japan
Framework

Administered

Account

for Technical

Assistance

Activities
Administered

Account for

Rwanda
19991998199919981999199819991998
(In thousands of U.S. dollars)(In thousands of SDRs)
Assets
Investments (Note 2)101,80096,70025,99720,6344,7983,389480788
Currency deposit9883
Interest receivable48
Total Assets101,89896,78325,99720,6344,7983,389484796
Resources
Total Resources101,89896,78325,99720,6344,7983,389484796
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Direct

Income Statements and Changes in Resources for the Years Ended April 30, 1999 and 1998

(Note 1)
Administered

Account Japan
Administered

Account for

Selected Fund

Activities—Japan
Framework

Administered

Account

for Technical

Assistance

Activities
Administered

Account for

Rwanda
19991998199919981999199819991998
(In thousands of U.S. dollars)(In thousands of SDRs)
Balance, beginning of the year96,78391,56120,63414,9963,3893,0297961,129
Contributions24,98818,8684,7122,961
Income earned on investments (Note 2)5,1155,2221,3591,0732331772438
101,89896,78346,98134,9378,3346,1678201,167
Payments to beneficiaries20,98414,3033,5362,778336371
Balance, end of the year101,89896,78325,99720,6344,7983,389484796
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

At the request of members, the IMF has established special purpose accounts to administer contributed resources and to perform financial and technical services consistent with the purposes of the IMF. The assets of each account and each subaccount are separate from the assets of all other accounts of, or administered by, the IMF and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

Administered Account Japan

At the request of Japan, the IMF established an account on March 3, 1989 to administer resources, made available by Japan or other countries with Japan’s concurrence, that are to be used to assist certain members with overdue obligations to the IMF. The resources of the account are to be disbursed in amounts specified by Japan and to members designated by Japan. At April 30, 1999 and 1998, cumulative resources received amounted to $135.2 million, of which $72.5 million had been disbursed.

Administered Account for Selected Fund Activities—Japan

At the request of Japan, the IMF established the Administered Technical Assistance Account—Japan on March 19, 1990 to administer resources contributed by Japan to finance technical assistance to member countries. On July 21, 1997 the account was renamed the Administered Account for Selected Fund Activities—Japan and amended to include the administration of resources contributed by Japan in support of the IMF’s Regional Office for Asia and the Pacific (OAP). The resources of the account designated for technical assistance activities are used with the approval of Japan and include the provision of scholarships; the resources designated for the OAP are used as agreed between Japan and the IMF for certain activities of the IMF with respect to Asia and the Pacific through the OAP. Disbursements can also be made from the account to the General Resources Account to reimburse the IMF for qualifying technical assistance projects and OAP expenses. At April 30, 1999, cumulative contributions received by the account designated for technical assistance amounted to $122.3 million, of which $101.4 million had been disbursed ($98.2 million and $81.3 million, respectively, at April 30, 1998).

Cumulative contributions include $5.9 million earmarked for scholarships, of which $5.6 million had been disbursed at April 30, 1999 ($4.7 million and $4.4 million, respectively, at April 30, 1998). At April 30, 1999, cumulative contributions designated for the OAP amounted to $2.2 million, of which $2.0 million had been disbursed ($1.2 million and $1.0 million, respectively, at April 30, 1998).

Framework Administered Account for Technical Assistance Activities

The Framework Administered Account for Technical Assistance Activities (“the Framework Account”) was established by the IMF on April 3, 1995 to receive and administer contributed resources that are to be used to finance technical assistance consistent with the purposes of the IMF. The financing of technical assistance activities is implemented through the establishment and operation of subaccounts within the Framework Account. The establishment of a subaccount requires the approval of the Executive Board.

Resources are to be used in accordance with the written understandings between the contributor and the Managing Director. Disbursements can also be made from the Framework Account to the General Resources Account to reimburse the IMF for its costs incurred on behalf of technical assistance activities financed by resources from the Framework Account. At April 30, 1999, cumulative contributions received by the account amounted to $11.8 million, of which $7.5 million had been disbursed ($7.1 million and $4.0 million, respectively, at April 30, 1998).

Subaccount for Japan Advanced Scholarship Program

At the request of Japan, this subaccount was established on June 6, 1995 to finance the cost of studies and training of nationals of member countries in macroeconomics and related subjects at selected universities and institutions. The scholarship program focuses primarily on the training of nationals of Asian member countries, including Japan. At April 30, 1999, cumulative contributions received amounted to $4.3 million, of which $2.7 million had been disbursed ($2.9 million and $1.3 million, respectively, at April 30, 1998).

Rwanda-Macroeconomic Management Capacity Subaccount

At the request of Rwanda, this subaccount was established on December 20, 1995 to finance technical assistance to rehabilitate and strengthen Rwanda’s macroeconomic management capacity. At April 30, 1999, cumulative contributions received amounted to $1.5 million, of which $1.5 million had been disbursed ($1.5 million and $1.3 million, respectively, at April 30, 1998).

Australia-IMF Scholarship Program for Asia Subaccount

At the request of Australia, this subaccount was established on June 5, 1996 to finance the cost of studies and training of government and central bank officials in macroeconomic management so as to enable them to contribute to their countries’ achievement of sustainable economic growth and development. The program focuses primarily on the training of nationals of Asian countries. At April 30, 1999, cumulative contributions received amounted to $0.7 million, of which $0.5 million had been disbursed ($0.5 million and $0.3 million, respectively, at April 30, 1998).

Switzerland Technical Assistance Subaccount

At the request of Switzerland, this subaccount was established on August 27, 1996 to finance the costs of technical assistance activities of the IMF that consist of policy advice and training in macroeconomic management. At April 30, 1999, cumulative contributions received amounted to $4.6 million, of which $2.3 million had been disbursed ($2.0 million and $0.9 million, respectively, at April 30, 1998).

French Technical Assistance Subaccount

At the request of France, this subaccount was established on September 30, 1996 to cofinance the costs of training in economic fields for nationals of certain member countries. At April 30, 1999, cumulative contributions received amounted to $0.26 million, of which $0.22 million had been disbursed ($0.26 million and $0.13 million, respectively, at April 30, 1998).

Denmark Technical Assistance Subaccount

At the request of Denmark, this subaccount was established on August 25, 1998 to finance the costs of technical assistance activities of the IMF that consist of advising on policy and administrative reforms in the fiscal, monetary, and related statistical fields. At April 30, 1999, cumulative contributions received amounted to $0.47 million, of which $0.19 million had been disbursed.

Administered Account for Rwanda

At the request of the Netherlands, Sweden, and the United States (“the donor countries”), the IMF established an account on October 27, 1995 to administer resources contributed by the donor countries to provide grants to Rwanda. These grants are to be used for reimbursing the service charge and reducing, to the equivalent of a rate of ½ of 1 percent a year, the rate of the quarterly charges payable by Rwanda on its use of the IMF’s financial resources under the Compensatory and Contingency Financing Facility (CCFF). At April 30, 1999, cumulative contributions received by the account amounted to SDR 1.54 million, of which SDR 1.19 million had been disbursed (SDR 1.54 million and SDR 0.86 million, respectively, at April 30, 1998).

1. Accounting Practices

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

Administered Account Japan, Administered Account for Selected Fund Activities—Japan, and Framework Administered Account for Technical Assistance Activities

The accounts are expressed in U.S. dollars. All transactions and operations of these accounts, including the transfers to and from the accounts, are denominated in U.S. dollars, except for transactions and operations in respect of the OAP, which are denominated in Japanese yen, or in other currencies as agreed between Japan and the IMF. Contributions denominated in other currencies are converted into U.S. dollars upon receipt of the funds.

Administered Account for Rwanda

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

CurrencyAmounts
To

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

Transfers to and disbursements from the accounts are made in U.S. dollars or in other freely usable currencies. Transactions and operations of the accounts shall be denominated in SDRs. Contributions denominated in other currencies are converted into SDRs upon receipt of the funds.

2. Investments

The assets of the accounts are invested pending their disbursement and are valued at cost, which approximates market value. Interest received on these assets varies and is market related.

3. Accounts Termination

Administered Account Japan

The account can be terminated by the IMF or by Japan. Any remaining resources in the account at termination are to be returned promptly to Japan.

Administered Account for Selected Fund Activities—Japan

The account can be terminated by the IMF or by Japan. Any resources that may remain in the account at termination, net of accrued liabilities under technical assistance projects or in respect of the OAP, are to be returned promptly to Japan.

Framework Administered Account for Technical Assistance Activities

The Framework Account or any subaccount thereof may be terminated by the IMF at any time. The termination of the Framework Account shall terminate each subaccount thereof. A subaccount may also be terminated by the contributor of the resources to the subaccount. Termination shall be effective on the date that the IMF or the contributor, as the case may be, receives notice of termination. Any balances, net of the continuing liabilities and commitments under the activities financed, that may remain in a subaccount upon its termination are to be returned promptly to the contributor.

Administered Account for Rwanda

The account can be terminated at any time by the IMF or by unanimous agreement of the donor countries. The account shall, in any case, be terminated by the IMF when Rwanda’s financial obligations to the IMF under the CCFF have been fully discharged or when the resources of the account have been exhausted, whichever is earlier. Any balance in the account at termination shall be transferred promptly to the donor countries, in proportion to their contribution, or to Rwanda, if so instructed.

Trust Fund

Balance Sheet as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Assets
Loans receivable (Note 2)89,34589,784
Interest and charges receivable and accrued (Note 3)26,39925,952
Total Assets115,744115,736
Resources and Deferred Income
Trust resources89,34589,784
Deferred income (Note 3)26,39925,952
Total Resources and Deferred Income115,744115,736
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams/s/ M. Camdessus
TreasurerManaging Director

Income Statement for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Income
Interest and charges on loans (Note 2)448450
Deferred income, net of settlements (Note 3)(448)(450)
Net Income
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statement of Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Balance, beginning of the year89,78490,444
Net income
Balance before transfers to the Special Disbursement Account89,78490,444
Transfers to the Special Disbursement Account (Note 4)(439)(660)
Balance, end of the year89,34589,784
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

The Trust Fund, for which the IMF is Trustee, was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualify for assistance.

In 1980, the IMF, as Trustee, decided that, upon the completion of the final loan disbursements, the Trust Fund would be terminated as of April 30, 1981, and after that date, the activities of the Trust Fund have been confined to the conclusion of its affairs. The resources of the Trust Fund are separate from the assets of all other accounts of, or administered by, the IMF and cannot be used to discharge liabilities or to meet losses incurred in the administration of other IMF accounts.

I. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

Amounts
CurrencyTo

December 31,

1998
From

January 1,

1997
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred, except that interest income from members that are overdue in settling their obligations to the Trust Fund by six months or more is deferred and is recognized as income only when paid, unless the member has remained current in settling charges when due (see Note 3). Further discussions of specific accounting principles and disclosure practices have been included in other notes. Following the termination of the Trust Fund as of April 30, 1981, residual administrative costs have been absorbed by the General Resources Account of the IMF.

2. Loans

Loans were made from the Trust Fund to those eligible members that qualified for assistance in accordance with the provisions of the Trust Fund instrument. The final Trust Fund loan installment was due on March 31, 1991. Interest on the outstanding loan balances is charged at the rate of ½ of 1 percent a year, although special charges have been levied on overdue payments of interest and principal since February 1986. Beginning May 1, 1993, special charges on overdue obligations to the Trust Fund have been suspended for members who are more than six months overdue.

3. Overdue Obligations

At April 30, 1999 and 1998, three members with obligations to the Trust Fund were six months or more overdue in discharging their obligations to the Trust Fund. The recognition of interest income on the loans outstanding to these members and of special charges due from them is being deferred. At April 30, 1999, total deferred income amounted to SDR 26.4 million (SDR 26.0 million at April 30, 1998). Overdue loan repayments and interest and special charges due from these members were as follows:

LoansInterest and

Special Charges
1999199819991998
In millions of SDRs
Total overdue89.389.826.325.8
Overdue six months or more89.389.826.025.6
Overdue three years or more89.389.824.924.4

The type and duration of the arrears of these members at April 30, 1999 were as follows:

MemberLoansInterest

and Special

Charges
TotalLongest Overdue

Obligation
In millions of SDRs
Liberia23.66.830.4January 1985
Somalia6.51.37.8July 1987
Sudan59.218.277.4June 1985
Total89.326.3115.6

4. Transfer of Resources

The resources of the Trust Fund held on April 30, 1981 or received thereafter have been used to pay interest and principal when due on loan obligations and to make transfers to the Special Disbursement Account.

Supplementary Financing Facility Subsidy Account

Balance Sheet as at April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Assets
Deposits (Note 2)2,2392,381
Interest receivable2025
Total Assets2,2592,406
Resources
Total Resources2,2592,406
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David WilliamsTreasurer
/s/ M. CamdessusManaging Director

Income Statement and Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of SDRs)(Note 1)
19991998
Balance, beginning of the year2,4062,308
Investment income9298
Balance before transfers2,4982,406
Transfers to the Special Disbursement Account (Note 3)(239)
Balance, end of the Year2,2592,406
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

The Supplementary Financing Facility Subsidy Account ("the Subsidy Account"), which is administered by the IMF, was established in December 1980 to assist low-income developing country members to meet the cost of using resources made available through the IMF’s Supplementary Financing Facility and under the policy on exceptional use. All repurchases due under these policies were scheduled for completion by January 31, 1991, and the final subsidy payments were approved in July 1991. However, two members (Liberia and Sudan), overdue in the payment of charges, remain ineligible to receive previously approved subsidy payments until their overdue charges are settled. Accordingly, the account remains in operation and has retained amounts for payment to these members after the overdue charges are paid.

The resources of the Subsidy Account are separate from the assets of all other accounts of, or administered by, the IMF and cannot be used to discharge liabilities or to meet losses incurred in the administration of other IMF accounts.

1. Accounting Practices

The accounts are expressed in terms of the SDR. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of currencies of five members. As of January 1, 1999, the deutsche mark and the French franc were substituted by the euro in the SDR valuation basket. The currencies in the basket and their amounts are as follows:

Amounts
CurrencyTo

December 31,

1998
From

January 1,

1999
Deutsche mark/euro as of
January 1, 19990.4460.228
French franc/euro as of
January 1, 19990.8130.1239
Japanese yen27.227.2
Pound sterling0.1050.105
U.S. dollar0.5820.5821

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Deposits

The assets of the Subsidy Account, pending their disbursement, are held in the form of interest-earning time deposits denominated in SDRs.

3. Transfer of Resources

Resources in excess of the remaining subsidy payments are to be transferred to the Special Disbursement Account. At April 30, 1999 and 1998, subsidy payments totaling SDR 2.2 million had not been made to Liberia and Sudan and were being held pending the payment of overdue charges by these members.

Retired Staff Benefits Investment Account

Balance Sheet as at April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Assets
Investments (Note 2)
Cash equivalents30,03429,495
Other177,615144,878
Interest and other receivables1,1431,931
Total Assets208,792176,304
Resources and Liabilities
Resources198,185176,304
Accounts payable10,607
Total Resources and Liabilities208,792176,304
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams/s/ M. Camdessus
TreasurerManaging Director

Income Statement and Changes in Resources for the Years Ended April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Balance, beginning of the year176,304144,848
Contributions received10,20012,600
Income earned on investments (Note 2)7,7997,865
Net gain in current value of investments (Note 2)5,01911,667
Investment fees(1,137)(676)
Balance, end of the year198,185176,304
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Purpose

The Retired Staff Benefits Investment Account ("the RSBIA") was established to hold, administer, and invest resources contributed by the IMF for meeting postretirement medical and life insurance benefits to eligible retirees of the IMF and other beneficiaries. The RSBIA accumulates resources to finance benefits to current and future retirees.

The assets of the RSBIA consist of the IMF’s contributions and the income earned thereon. Assets are within the sole ownership of the IMF and are to be used to meet the claims of retirees and the administrative costs of the RSBIA. Contributions are made periodically from the General Resources Account to the RSBIA, taking into consideration the actuarial valuation of the IMF’s cumulative cost of these benefits. Cumulative contributions received by the RSBIA amounted to $150 million at April 30, 1999 ($140 million at April 30, 1998).

The portion of the cumulative past-service cost that has been charged to income in the General Resources Account is fully funded.

The assets of the RSBIA are kept separate from the assets of all other accounts of, or administered by, the IMF and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1. Accounting Practices

The RSBIA is expressed in U.S. dollars. All transactions and operations of the RSBIA, including the transfers to and by the RSBIA, are denominated in U.S. dollars. The cost of transactions in other currencies—for example, the payment of future benefits—will be paid by the RSBIA.

The RSBIA is maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

2. Investments

Resources placed to the RSBIA have been invested by the IMF. In accordance with its investment policy, the RSBIA invests in equity securities, debt securities, short-term investments, and real estate. Investments in securities listed on stock exchanges are valued at the last reported market sales price on the last business day of the accounting period. Over-the-counter securities are valued at their bid price on the last business day of the accounting period. The valuation of purchases and sales is made on the trade date basis.

The net gain in the current value of investments represents the gains and losses realized during the year from the sale of investments, the unrealized appreciation and depreciation of the market value of investments, and, for investments denominated in currencies other than the U.S. dollar, valuation differences arising from exchange rate changes of other currencies against the dollar market value.

A summary of the RSBIA’s investments at market values is as follows:

Investments19991998
In millions of U.S. dollars
Equity securities7763
Debt securities7562
Short-term investments3030
Real estate2721
209176

In addition to these investments, the RSBIA held commitments in fixed-income futures contracts to minimize interest rate risk. At April 30, 1999, the notional value of these derivatives amounted to $9.6 million and the unrealized gain was less than $0.1 million ($11.1 million and less than $0.1 million at April 30, 1998).

3. Actuarial Valuation

Eligible retirees can elect to continue their life insurance coverage and medical coverage. The cost of these benefits is actuarially determined, based on the data in effect at the beginning of the year. The IMF’s actuarially determined cost is estimated at $198 million at April 30, 1999 ($183 million at April 30, 1998). Each year the IMF amortizes a portion of the past-service cost and recognizes the increase in the liability during the year as an expense in the General Resources Account. These amounts, less the return on investments, are transferred to the RSBIA to be held and invested pending their use by the IMF. During the year ended April 30, 1999, an amount of $10.2 million has been transferred to the RSBIA ($12.6 million during the year ended April 30, 1998).

It is expected that the RSBIA will be a net recipient of resources until the unfunded cost is fully amortized and its assets meet the cost of benefits to retirees.

4. Account Termination

The RSBIA can be terminated by the IMF at any time. After meeting any existing obligations, the resources remaining in the RSBIA are to be transferred to the General Resources Account of the IMF.

Report of the External Audit Committee to the Board of Governors of the International Monetary Fund

Washington, DC

June 24, 1999

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have carried out procedures in order to form an opinion on the financial statements of the Staff Retirement Plan as at and for the year ended April 30, 1999.

These financial statements are the responsibility of the International Monetary Fund. Our responsibility is to express an opinion on these financial statements based on our procedures.

These included reviews of accounting and internal control systems and an evaluation of the extent and results of tests of the accounting records, which were substantially conducted using an outside accounting firm. In our opinion, the procedures undertaken by us, after reviewing the work performed by the outside accounting firm and the Office of Internal Audit and Inspection, constitute an audit conducted in accordance with generally accepted auditing standards.

Using these standards, we planned and performed the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the International Monetary Fund, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Audit Opinion

In our opinion, the financial statements of the Staff Retirement Plan have been prepared in accordance with generally accepted accounting principles as described in Note 1 to the financial statements, on a basis consistent with that of the preceding year, and give a true and fair view of the financial position as at April 30, 1999, and of the results of operations and transactions during the year then ended.

EXTERNAL AUDIT COMMITTEE

/s/ José Nicolas Agudin, Chairman (Argentina)

/s/ Penny Jones (United Kingdom)

/s/ K.N. Memani (India)

Staff Retirement Plan

Statement of Accumulated Plan Benefits and Net Assets Available for Benefits as at April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Accumulated Plan Benefits
Actuarial present value of accumulated Plan benefits
Vested benefits
Retired participants716,200635,000
Active participants614,700595,800
Nonvested benefits726,900694,700
Total actuarial present value of accumulated Plan benefits2,057,8001,925,500
Assets Available for Benefits
Investments (Note 3)3,307,2263,075,069
Receivables
Accrued interest and dividends13,54113,303
Contributions2901,501
Other3936
13,87014,840
Total assets3,321,0963,089,909
Liabilities
Accounts payable7,4945,428
Deferred contributions (Note 2)30,48414,729
Total liabilities37,97820,157
Net assets available for benefits3,283,1183,069,752
Excess of net assets available for benefits over actuarial
present value of accumulated Plan benefits (Note 2)1,225,3181,144,252
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams/s/ M. Camdessus
TreasurerManaging Director

Statement of Changes in Accumulated Plan Benefits for the Years Ended April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Actuarial present value of accumulated
Plan benefits, beginning of the Year1,925,5001,765,600
Increase (decrease) during the year attributable to
Benefits accumulated (Note 1)41,40067,300
Interest accrued160,800147,800
Benefits paid(69,900)(55,200)
Net increase132,300159,900
Actuarial present value of accumulated
Plan benefits, end of the year2,057,8001,925,500
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statement of Changes in Net Assets Available for Benefits for the Years Ended April 30,1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Investment Income186,882404,944
Net realized/unrealized gain on investments (Note 3)88,20587,296
Interest and dividends275,087492,240
Contributions (Note 2)151
International Monetary Fund22,17520,970
Participants211133
Participants restored to service(2,366)(209)
Net transfers to retirement plans of other international organizations20,02021,045
Total additions295,107513,285
Benefits
Pension48,80544,543
Commutation14,4665,045
Withdrawal3,6753,859
Death118406
67,06453,853
Investment Fees14,67713,701
Total payments81,74167,554
Net additions213,366445,731
Net Assets Available for Benefits
Beginning of the year3,069,7522,624,021
End of the year3,283,1183,069,752
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Description of the Plan

General

The Staff Retirement Plan ("the Plan") is a defined-benefit pension plan covering nearly all staff members of the International Monetary Fund ("the Employer"). All assets and income of the Plan are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants, retired participants, and their beneficiaries.

Benefits

Annual Pension

Participants are entitled to an unreduced pension beginning at normal retirement age of 62. The amount of the pension is based on the number of years of service, age at retirement, and highest average gross remuneration. The provisions for determining gross remuneration are different for benefits earned before and after May 1, 1990. The gross remuneration on which pensions from the Plan are based is limited to a predetermined amount, which is periodically adjusted. Pension benefits attributable to gross remuneration in excess of this amount are paid from the Supplemental Retirement Benefit Plan ("the SRBP").

The accrual rate of benefits earned before May 1, 1990 was 2 percent of gross remuneration for each year of service, while the accrual rate of benefits earned after May 1, 1990 is 2.2 percent for the first 25 years of service and 1.8 percent for the next 10 years of service. The pensions of participants hired before May 1, 1990 are based on a prorated combination of the old and new accrual rates, using the time period of service before and after May 1, 1990.

Participants between the ages of 50 and 55 may retire with a reduced pension if their age and years of service total at least 75. Participants aged 55 and older may retire with an unreduced pension if the sum of their age and years of service equals 85 or more.

Cost of Living Adjustment

Whenever the cost of living increases during a financial year, pensions shall be augmented by a pension supplement that, expressed in percentage terms, shall be equal to the increase in the cost of living for the financial year of the country of permanent residence. If the cost of living increase for a financial year exceeds 3 percent, the Employer has the right, for good cause, to reduce prospectively the additional supplement to not less than 3 percent. Deferred pensions become subject to cost of living adjustments when the sum of a former participant’s age and years of service is at least 50.

Withdrawal Benefit

Upon withdrawal from the Plan, a participant with at least three years of eligible service may elect to receive either a withdrawal benefit or a deferred pension to commence after the participant has reached the age of 55 or age 50 if age and years of service add to at least 75. The withdrawal benefit is a percentage of the participant’s highest average gross remuneration.

Commutation

A pensioner entitled to receive a normal, early retirement, or deferred pension may elect to commute up to one-third of his or her pension, and receive a lump-sum amount at retirement in lieu of the amount of pension commuted. A participant entitled to receive a disability pension may elect to commute one-third of the early retirement pension that would otherwise have been applicable.

Disability Pensions, Death Benefits, and Survivor Benefits

The Plan also provides for disability pensions, death benefits, and benefits to surviving spouses and children of deceased participants.

Currency of Pension Payments

A participant may elect to have his or her pension paid in the currency of the country in which he or she has established permanent residence or in a combination of two currencies, the U.S. dollar and the currency of the country in which the participant is a permanent resident.

Contributions

Participants

As a condition of employment, regular staff members are required to participate in, and to contribute to, the Plan. The contribution rate is presently 7 percent of the participant’s gross remuneration. Certain other categories of staff members may elect to participate in the Plan.

Employer

The Employer meets certain administrative costs of the Plan, such as the actuary’s fees, and contributes any additional amount not provided by the contribution of participants to pay costs and expenses of the Plan not otherwise covered. In financial year 1999, the administrative costs met by the Employer were approximately $0.13 million ($0.09 million in 1998).

Plan Termination

In the event of the termination of the Plan by the Employer, the assets of the Plan shall be used to satisfy all liabilities to participants, retired participants and their beneficiaries, and all other liabilities of the Plan. Any remaining balance of the assets shall be returned to the Employer.

1. Accounting Practices

The financial statements of the Plan are prepared on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and disclosure practices have been included in other notes.

Accumulated Plan Benefits

The actuarial value of vested benefits is presented for two categories. For retired participants, the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner and, if applicable, the surviving spouse of the pensioner. For active participants, the amount presented equals the present value of the deferred pension earned to the valuation date for a participant, or, if greater, the value of the withdrawal benefit for that participant, summed over all participants. For the purpose of determining the actuarial value of the vested benefits at the end of the Plan year, it is assumed that the Plan will continue to exist and that salaries will continue to rise, but that participants will not earn pension benefits beyond the date of the calculation.

The amount of nonvested benefits represents the total of the withdrawal benefits of all participants with less than three years of eligible service together with the estimated effect of projected salary increases on benefits expected to be paid.

In contrast to the actuarial valuation for funding purposes, the actuarial valuation used for the financial statements represents the portion of the benefit obligation that had been accumulated by April 30, 1999. It reflects only the service to that date and does not take into account the fact that the value of accumulated benefits, which are the Plan’s liabilities, is expected to increase each year. Nor does it take into account the fact that the market value of investments may fluctuate from year to year, which is significant because the Employer’s liability is the excess of the present value of accumulated benefits over the value of the assets. Accordingly, the financial statements do not measure the amount that the Employer will be required to fund in the future.

Valuation of Investments

Investments are recorded at market value. For investments in securities listed on stock exchanges, market value is the last reported market sales price on the last business day of the accounting period. For over-the-counter securities, market value is the bid price on the last business day of the accounting period. For investments in real estate, market value is the last reported adjusted appraised value. Derivatives are valued at fair value, which is equivalent to the unrealized gain or loss.

Trading Instruments

The net gain or loss in the market value of investments represents the gains and losses realized during the accounting period from the sale of investments, the unrealized appreciation and depreciation of the market value of investments, and, for investments denominated in currencies other than the U.S. dollar, valuation differences arising from exchange rate changes of other currencies against the dollar.

Risk-Management Instruments

The net fair value of forward contracts, futures contracts, swaps, and options is included in the net assets available for Plan benefits, and the changes in value of such contracts are recognized currently in the financial statements. For swap derivatives, options, and forward and futures contracts, the contract or notional amounts do not represent exposure to credit loss. The potential credit loss on these instruments, if any, approximates the unrealized gain on the open contract.

2. Actuarial Valuation and Funding Policy

Under the actuarial valuation used for funding purposes, it is assumed that the Plan will continue to exist and that active participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement, but that no new participant will join the Plan (the “closed method").

Funding by the Employer is based on a valuation method, known as the “aggregate cost method,” that expresses liabilities and contribution requirements as single consolidated figures that include provision for experience gains and losses and cost of living increases. Required Employer contributions are expressed as a percentage to be applied to the gross remuneration of participants and are based on the valuation completed 12 months previously. The Employer contribution rate for the year beginning May 1, 1997 was set at 5 percent of pensionable gross remuneration. Of this amount, 0.05 percent represented a current contribution (equal to $0.15 million) and 4.95 percent represented a deferred contribution (equal to $14.7 million). For financial year 1999, the entire amount represents a deferred contribution (equal to $15.8 million). The deferred contribution represents the Employer’s prepayment of future contributions.

The actuarial assumptions used in the valuation to determine the Employer’s contributions include (1) life expectancy based on the 1984 and 1982 United Nations mortality tables for men and women, respectively; (2) withdrawal or retirement of a certain percentage of staff at each age, differentiated by gender; (3) an average rate of return on investments of 8.5 percent a year; (4) a discount rate of 8.5 percent; (5) an average inflation rate of 5 percent a year; (6) salary increase percentages that vary with age; and (7) valuation of assets using a five-year moving-average method.

The results of the April 30, 1998 and 1997 valuations were:

19981997
In millions of U.S. dollars
Present value of benefits payable2,9012,699
Less: Assets for valuation purposes3,0582,580
Required future funding(157)119
Less: Present value of prospective
contributions from participants
(7 percent of gross remuneration)220211
Present value of future funding required
from the Employer(377)(92)

3. Investments

In accordance with its investment policy, the Plan invests in equity securities, debt securities, short-term investments, real estate investments, and other financial instruments for risk management including futures, forward currency contracts, options, and swaps.

A summary of the Plan’s investments, valued at market value or fair value, is as follows:

19991998
In millions of U.S. dollars
Equity securities2,4442,181
Debt securities426463
Real estate269259
Short-term investments168172
3,3073,075

In addition to the above investments, the Plan holds investments in derivatives, which are aimed at optimizing investment positions, given levels of market, credit, counterparty, and foreign currency risk. These derivative investments are recorded at fair value.

At April 30, 1999 and 1998, the notional value of the Plan’s risk management investments was as follows:

19991998
In millions of U.S. dollars
Futures
Long positions311116
Short positions2625
Forwards
Purchases1,377831
Sales1,377831
Swaps2

Futures Contracts

Futures contracts are commitments to either purchase or sell a financial instrument at a future date for a specified price and may be settled in cash or through delivery of the underlying financial instrument. The credit risk of futures contracts is limited because of daily cash settlement of the net change in the value of open contracts; therefore, there were no unrealized gains or losses at April 30, 1999 or 1998.

The Plan enters into financial futures contracts to protect the Plan against market price risks and to take investment positions. Contracts generally have terms of less than one year.

Forward Contracts

Forward contracts are similar in character to futures contracts. However, they have a greater degree of credit risk, depending on the counterparties involved, because daily cash settlements are not required. To manage this exposure, the Plan deals with counterparties of good credit standing and enters into master netting agreements whenever possible.

The Plan’s principal objective in entering into forward foreign currency exchange contracts is to manage foreign currency fluctuations relative to investments in its international portfolio. These contracts generally have terms of not more than three months. At April 30, 1999, the unrealized loss totaled $8.3 million ($1.7 million unrealized gain at April 30, 1998).

Swaps

Equity swaps are commitments to exchange the returns arising from one equity portfolio with the returns of another equity portfolio for a specified time period on a notional amount invested. Credit risk on an equity swap contract varies according to the terms of the agreement and the counterparties involved, which are only those of good credit standing.

The Plan’s principal objective in entering into equity swap agreements is to facilitate a market-neutral strategy in the United Kingdom. At April 30, 1999, there were no swaps outstanding. The unrealized loss on swaps at April 30, 1998 totaled $1.6 million.

Report of the External Audit Committee to the Board of Governors of the International Monetary Fund

Washington, DC

June 24, 1999

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have carried out procedures in order to form an opinion on the financial statements of the Supplemental Retirement Benefit Plan as at and for the year ended April 30, 1999.

These financial statements are the responsibility of the International Monetary Fund. Our responsibility is to express an opinion on these financial statements based on our procedures.

These included reviews of accounting and internal control systems and an evaluation of the extent and results of tests of the accounting records, which were substantially conducted using an outside accounting firm. In our opinion, the procedures undertaken by us, after reviewing the work performed by the outside accounting firm and the Office of Internal Audit and Inspection, constitute an audit conducted in accordance with generally accepted auditing standards.

Using these standards, we planned and performed the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the International Monetary Fund, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Audit Opinion

In our opinion, the financial statements of the Supplemental Retirement Benefit Plan have been prepared in accordance with generally accepted accounting principles as described in Note 1 to the financial statements, on a basis consistent with that of the preceding year, and give a true and fair view of the financial position as at April 30, 1999, and of the results of operations and transactions during the year then ended.

EXTERNAL AUDIT COMMITTEE

/s/ Jose Nicolas Agudin, Chairman (Argentina)

/s/ Penny Jones (United Kingdom)

/s/ K.N. Memani (India)

Supplemental Retirement Benefit Plan

Statement of Accumulated Plan Benefits and Net Assets Available for Benefits as at April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Accumulated Plan Benefits
Actuarial present value of accumulated Plan benefits
Vested benefits32,00023,300
Nonvested benefits100100
Total actuarial present value of accumulated Plan benefits32,10023,400
Assets Available for Benefits
Cash at bank (Note 3)441195
Contributions receivables 37
Total assets 444202
Liabilities
Deferred contributions (Note 2)17456
Net assets available for benefits270146
Excess of actuarial present value of accumulated
Plan benefits over assets available for benefits31,83023,254
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams/s/ M. Camdessus
TreasurerManaging Director

Statement of Changes in Accumulated Plan Benefits for the Years Ended April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Actuarial present value of accumulated
Plan benefits, beginning of the year23,40020,900
Increase (decrease) during the period attributable to
Benefits accumulated8,7002,300
Interest accrued1,9001,700
Benefits paid(1,900)(1,500)
Net increase8,7002,500
Actuarial present value of accumulated
Plan benefits, end of the year32,10023,400
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statement of Changes in Net Assets Available for Benefits for the Years Ended April 30, 1999 and 1998

(In thousands of U.S. dollars)(Note 1)
19991998
Investment Income
Interest105
Contributions (Note 2)
International Monetary Fund1,8611,513
Participants17175
Participants restored to service1
Net transfers to retirement plans of other international organizations(3)(8)
2,0301,580
Total additions2,0401,585
Benefits
Pension1,8611,515
Withdrawal55
Total payments1,9161,515
Net additions12470
Net Assets Available for Benefits
Beginning of the year14676
End of the year270146
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1999 and 1998

Description of the Plan

General

The Supplemental Retirement Benefit Plan ("the SRBP") is a defined-benefit pension plan covering all participants of the Staff Retirement Plan of the International Monetary Fund ("the Employer") and operates as an adjunct to that Plan. All assets and income of the SRBP are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants and retired participants and their beneficiaries.

Benefits

The Staff Retirement Plan has adopted limits to pensions payable from that Plan. The SRBP provides for the payment of any benefit that would otherwise have been payable if these limits had not been adopted.

In financial year 1999, 76 pensioners received benefits from the SRBP (56 in financial year 1998).

Contributions

Before retirement, the Employer partially prefunds the SRBP for non-U.S. citizens who plan to retire in the United States, so that the taxable income of the participant is approximately equal to, but not more than, such income that would have accrued if the entire benefit had been payable from any of the prefunded assets of the Staff Retirement Plan. The prefunded amounts are used to pay any of the benefits payable, whether for U.S. or non-U.S. staff. Should the assets of the SRBP be exhausted, benefits are paid from current contributions by the Employer.

SRBP Termination

In the event of the termination of the SRBP by the Employer, the assets of the SRBP shall be used to satisfy all liabilities to participants, retired participants and their beneficiaries, and all other liabilities of the SRBP.

1. Accounting Practices

Accumulated SRBP Benefits

The actuarial present value of accumulated SRBP benefits is stated as at the date of the most recent actuarial valuation, which was April 30, 1999. The actuarial value of benefits is presented for two categories. The vested benefits relate to retired participants, and the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner and, if applicable, of the surviving spouse of the pensioner.

The nonvested benefits relate to active participants, and the amount presented equals the present value of the supplemental deferred pension earned to the valuation date for a participant, taking into account the estimated effect of projected salary increases. For the purpose of determining the actuarial value of the benefits at the end of the period, it is assumed that the SRBP will continue to exist, but that participants will not accumulate further contributory service beyond the date of the calculation.

Income Recognition

The SRBP maintains its accounts on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. Further discussions of specific accounting principles and isclosure practices have been included in other notes.

2. Actuarial Valuation and Bunding Policy

Under the actuarial valuation used for funding purposes, it is assumed that the Plan will continue to exist and that active participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement, but that no new participant will join the Plan (the “closed method").

The IMF contributes on an annual basis the difference between the benefits paid and the participants’ contributions. Funding by the Employer is based on a valuation method, known as the “aggregate cost method,” that expresses liabilities and contribution requirements as single consolidated figures that include provision for experience gains and losses and cost of living increases. Required Employer contributions are expressed as a percentage to be applied to the gross remuneration of participants and are based on the valuation completed 12 months previously. The Employer contribution rate for the year beginning May 1, 1997 was set at 5 percent of pensionable gross remuneration. Of this amount, 0.05 percent represented a current contribution and 4.95 percent represented a deferred contribution (equal to $0.06 million). For financial year 1999, the entire amount represents a deferred contribution (equal to $0.12 million). The deferred contribution represents the Employer’s prepayment of future contributions.

The actuarial assumptions used in the valuation to determine the Employer’s contributions include (1) life expectancy based on the 1984 and 1982 United Nations mortality tables for men and women, respectively; (2) withdrawal or retirement of a certain percentage of staff at each age, differentiated by gender; (3) an average rate of return on investments of 8.5 percent a year; (4) a discount rate of 8.5 percent; (5) an average inflation rate of 5 percent a year; (6) salary increase percentages that vary with age; and (7) valuation of assets using a five-year moving-average method.

3. Assets

Assets are maintained in a money market deposit account.

Glossary of Abbreviations

AsDB

Asian Development Bank

BIS

Bank for International Settlements

CCFF

Compensatory and Contingency Financing Facility

CCL

Contingent Credit Lines

DSBB

Dissemination Standards Bulletin Board

EBRD

European Bank for Reconstruction and Development

ECB

European Central Bank

ecu

European currency unit

EFF

Extended Fund Facility

EMU

European Economic and Monetary Union

EMS

European Monetary System

ERM

Exchange rate mechanism (of the EMS)

ESAF

Enhanced Structural Adjustment Facility

ESCB

European System of Central Banks

EU

European Union

GAB

General Arrangements to Borrow

GDDS

General Data Dissemination System

GDP

Gross domestic product

GNP

Gross national product

GRA

General Resources Account

HIPCs

Heavily indebted poor countries

IDA

International Development Association

IFC

International Finance Corporation

ILO

International Labor Organization

LIBOR

London interbank offered rate

Mercosur

Sectoral Community for the Common Market of the South

NAB

New Arrangements to Borrow

ODA

Official development assistance

OECD

Organization for Economic Cooperation and Development

PFP

Policy framework paper

PIN

Public Information Notice

RSBIA

Retired Staff Benefits Investment Account

SAF

Structural Adjustment Facility

SCA

Special Contingent Account

SDA

Special Disbursement Account

SDDS

Special Data Dissemination Standard

SDR

Special drawing right

SFD

Saudi Fund for Development

SRBP

Supplemental Retirement Benefit Plan

SRF

Supplemental Reserve Facility

STF

Systemic Transformation Facility

UN

United Nations

UNCTAD

United Nations Conference on Trade and Development

UNDP

United Nations Development Program

VAT

Value-added tax

WAEMU

West African Economic and Monetary Union

WTO

World Trade Organization

1Official monetary authorities comprise central banks and also currency boards, exchange stabilization funds, and treasuries, to the extent that they perform monetary authorities’ functions.
2During 1999, the remaining component of ecu reserves is expected to be replaced by instruments denominated in euros.
1See Selected Decisions, Twenty-Third Issue (June 30, 1998), page 258.
2Ibid, pages 256 and 257.
3Ibid., page 258.
4Ibid.
5Ibid., page 256.
6Ibid., pages 256 and 257.
7Ibid., pages 192–220.
8Ibid., pages 232 and 233.
9Ibid., page 55
10Ibid., pages 381 and 382.
11Ibid.
12Ibid., pages 28–46.
13Ibid., pages 135–37.
14Ibid., pages 184–91.
15Ibid., pages 243–46.
16Ibid., pages 57 and 58.
17Ibid., pages 243–46.
18Ibid., pages 474–76.
19Ibid., pages 279 and 280.
20Ibid., pages 273–75.
21Ibid., pages 523 and 524.
22Ibid., pages 524 and 525
23Ibid., pages 348 and 349.
24As February 21, 1999 is a Sunday, the last day for payment will be the next business day, that is, February 22, 1999.
25Ibid., page 495.
1In 1998/99, 66 press releases, 68 News Briefs, and 91 PINs were issued.
2To better respond to its critics, the IMF established a News and External Communications Division within the External Relations Department. During 1998/99, 17 letters to the editor and 42 articles by IMF management and senior staff appeared in major newspapers and journals.
1Mr. James D. Wolfensohn, President of the World Bank, Mr. Michel Camdessus, Managing Director of the International Monetary Fund, Mr. Abdelkrim Harchaoui, Minister of Finance of Algeria and Chairman of the Group of Twenty-Four, addressed the plenary session. Observers from a number of international and regional organizations also attended.
2Mr. Renato Ruggiero, Director-General of the World Trade Organization, Mr. James D. Wolfensohn, President of the World Bank, Mr. Michel Camdessus, Managing Director of the International Monetary Fund, and Mr. G.L. Peiris, Minister of Justice and Constitutional and Ethnic Affairs and Deputy Minister of Finance of Sri Lanka, Chairman of the Group of Twenty-Four, addressed the plenary session. Observers from a number of international and regional organizations also attended.

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