- Total resources
The IMF's total resources are comprised of its holdings of members' currencies, its holdings of
SDRs, its holdings of gold, and "other assets" (such as buildings and receivables). The IMF holds
103.4 million fine ounces of gold, valued on its balance sheet at SDR 5.9 billion on the basis of an
average historical acquisition cost. As mandated by the IMF's Articles of Agreement, gold
acquired prior to 1978 is valued at SDR 35 per ounce, the "official" price used at that time in
dealings among central banks. Gold acquired since 1978 (13 million ounces) is valued at the
market price in effect at the time of acquisition.
- Non-usable resources
Resources that are considered non-usable to finance the IMF's ongoing operations and
transactions are (i) its gold holdings, (ii) the currencies of members that are using IMF resources
and are therefore, by definition, in a weak balance of payments or reserve position, (iii) the
currencies of other members with relatively weak external positions, and (iv) the "other assets"
noted above. The use of IMF credit by a member increases the IMF's non-usable resources and
reduces its usable resources by equivalent amounts.
- Usable resources
These consist of (i) holdings of the currencies of members considered by the Executive Board to
have a sufficiently strong balance of payments and reserve position for their currencies to be used
in transactions, (ii) holdings of SDRs, and (iii) any unused amounts under credit lines already
activated (such as under the GAB/NAB). Amounts committed under 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. Minimum working balances required
for the IMF to be able to make payments that must be made in specified currencies are also
deducted. The Executive Board has decided that such balances be set at 10 percent of the quotas
of members deemed sufficiently strong for their currencies to be used.
- Net uncommitted usable resources (resources available to meet reserve
tranche purchases and new commitments)
Currently usable resources minus resources already committed under existing
arrangements and working balances as described above. This amount represents the resources
available to meet requests for use of reserve positions in the IMF and new requests for use of IMF
resources.
- Balances available under the General Arrangements to Borrow (GAB)
and the New Arrangements to Borrow (NAB)
The IMF has two borrowing arrangements--the New Arrangements to Borrow (NAB) and the
General Arrangements to Borrow (GAB)--that can be activated when supplementary resources
are needed to forestall or cope with an impairment of the international monetary system. The
NAB, established in November 1998, total SDR 34 billion with 25 members and institutions. The
GAB, established in 1962, enable the Fund to borrow a total of SDR 17 billion, from 11 members
or their central banks. An additional SDR 1.5 billion is available under an associated arrangement
with Saudi Arabia. The NAB do not replace the GAB, and the total available to the Fund under
the NAB and GAB combined is SDR 34 billion. However, the NAB are the facility of first and
principal recourse, unless a GAB participant requests the use of IMF resources, in which case a
proposal for calls may be made under either of the arrangements.
- Liquid liabilities
The IMF's liquid liabilities consist of (i) reserve tranche positions of members, which a member
acquires when the IMF uses the member's currency in its operations and through reserve assets
paid by the member in connection with quota payments, and (ii) the amount of any outstanding
borrowing by the IMF, e.g., under the GAB/NAB. Both reserve tranche positions and outstanding
lending under the GAB/NAB (together called reserve positions of members in the IMF) are part
of members' international reserves. The IMF cannot challenge a request by a member to draw on
its reserve position in the IMF when developments in its balance of payments or its reserve
position make this necessary and the IMF must be in a position to meet such requests. The vast
bulk of liquid liabilities reflects credit extended by the IMF.
- Liquidity ratio
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. The Fund does not formally apportion its
available net uncommitted resources between the amounts that might be needed to meet
encashment of members' reserve positions and resources to meet new commitments. However, the
first claim on the Fund's resources is to meet requests to liquidate members' positions in the
Fund--hence the importance of the liquidity ratio. It is difficult to project members' propensity to
use their reserve positions at any particular time, though the likelihood that all the Fund's liquid
liabilities would be encashed during a short period of time is relatively small. However, it is
incumbent on the Fund to be in a position to meet any request for an encashment of reserve
positions. For that purpose, the Fund needs to maintain an amount of usable resources that bears
a reasonable relation to its liquid liabilities. While this ratio is neither a fixed nor minimum ratio,
historically it has not fallen below 25-30 percent of liquid liabilities for any length of time, thereby
maintaining the Fund's capacity to meet members' requests. Application of this range to the Fund's
outstanding liquid liabilities is illustrated, in square brackets, in the table.
