NAC files, lot
60 D 137, “Documents”
The Acting Secretary of the National Advisory Council on
International Monetary and Financial Problems (Willis) to the Council
restricted
Document No. 1365
[
Washington
,] August 25, 1952.
- Subject:
- Standby Arrangements1 in the Fund
[Page 312]
The attached draft Fund decision has been agreed by the Staff Committee as
the basis for Council discussion of this subject. Underlined material
represents additions,2 and bracketed material deletions, that would be proposed
by the U.S. Executive Director. The bracketed numbers 2 and 1 represent the
proposed reversal of the order of the first two numbered paragraphs.
[Attachment]
International Monetary Fund Stand-By
Arrangements
draft decision
The Fund is prepared to consider requests by members for stand-by
arrangements designed to give assurance that, during a fixed period of
time, transactions up to a specified amount will be made whenever a
member requests and without further consideration of its position,
unless the ineligibility provisions of the Fund Agreement have been
invoked. The following paragraphs set forth the general framework for
stand-by arrangements:
- [2] 1.
- In considering the request for a stand-by arrangement or a renewal of a stand-by arrangement,
the Fund would apply the same policies that are applied to
requests for immediate drawings, including
consideration of the performance of the member in making
progress in achieving the objectives and purposes of the
Fund and in carrying out agreed programs of action. The
Fund would agree to a stand-by arrangement only for a member
that would be in a position to make purchases of the same amount
of exchange from the Fund.
- [1] 2.
- Stand-by arrangements would [generally] be limited to periods
of not more than six months, but could be renewed by a new
decision of the Executive Board.
- 3.
- Such arrangements would cover not more than the portion of the
quota which a member would be allowed, under Article V, Section
3, to draw within the period provided in the arrangement. This
does not preclude the Fund from making stand-by arrangements for
larger amounts on terms in accordance with Article V, Section
4.
- 4.
- A charge of ⅛ of 1% would be payable to the Fund at the time a
stand-by arrangement is agreed. This charge would be payable in
gold (or United States dollars in lieu of gold) or the member’s
currency as specified for other charges by Article V, Section 8
(f). In [Page 313] the event that
a stand-by arrangement is renewed, an additional charge of ⅛ of
1% would be payable to the Fund.
- 5.
- A member having a stand-by arrangement would have the right to
engage in the transactions covered by the stand-by arrangement
without further review by the Fund. This right of the member
could be suspended only with respect to requests received by the
Fund after: (a) a formal ineligibility, or (b) a decision of the
Executive Board to suspend transactions generally or in order to
consider a proposal, made by an Executive Director or the
Managing Director, that might lead to a formal
ineligibility.3
