Press Release No. 07/308

Press Release: IMF Executive Board Completes Midyear Review of Fund's FY 2008 Income Position

December 21, 2007

The Executive Board of the International Monetary Fund (IMF) completed its midyear review of the Fund's income position for the financial year ending April 30, 2008 (FY 2008) on December 14, 2007. Each year the Board conducts a midyear review of the Fund's income position.

The updated FY 2008 income outlook remains fundamentally unchanged from that at the time of the last review in April 2007 (see Press Release No. 07/82). Given this, and the transitional nature of FY 2008 pending development of a new income model for the Fund, the Board decided to leave the margin for calculating the rate of charge—interest on Fund credit to members—unchanged at 108 basis points above the SDR interest rate.

The income shortfall for FY 2008 is now projected at about SDR 90 million (US$140 million) compared to an initial projection of about SDR 146 million (US$228 million). The latest projection incorporates the estimated effect of the settlement of overdue charges (interest) associated with the prospective clearance of arrears by Liberia, which is expected to take place in early 2008 (see Press Release No. 07/254). The projection also reflects updated assumptions on interest rates and the phasing of purchases, as well as lower expenditures compared to the FY 2008 budget.

The midyear review of the Fund's income position does not include any projections beyond FY 2008 as it was completed in the context of the ongoing work on the Fund's income and expenditure framework. It is expected that updated medium-term projections will be discussed in early 2008 as part of this work.