The business scope of the International Monetary Fund

According to the provisions of the Articles of Agreement of the International Monetary Fund, the IMF provides short-term credit to member states when they experience temporary imbalances in their balance of payments. , provided to government agencies such as the Ministry of Finance, Central Bank, and Foreign Exchange Stabilization Fund of member states. Loans are limited to recurring payments for trade and non-trade, and the amount is proportional to the additional burden of member states. The method of providing loans is for member countries to apply to the IMF for the purchase of foreign exchange with their own currency, which is generally called purchase, that is, using their own currency to purchase foreign exchange or withdraw funds, which is the additional burden that member countries receive. Use a certain amount of funds. Member states repay by repurchasing their national currencies in foreign currency or special drawing rights. No matter what currency the loan is provided in, it is denominated in SDRs, and the interest is also paid in special drawing rights.

The loan business of the International Monetary Fund

⒈Ordinary loan

Ordinary loan is the basic loan of the IMF, also known as the basic credit facility loan (Basic loan) Credit Facility). It is a fund formed by the IMF using the shares subscribed by each member state. It provides short-term credit to member states with a term of no more than five years, and the interest rate increases with the term. Member states adopt tranche policies for borrowing ordinary loans, that is, they divide the member states’ withdrawal rights into reserve part loans and credit part loans. The latter is divided into four different grades, and regulations are set for each grade. Different payment conditions apply.

⒉Compensatory & Contingencing Facility (CCFF)

Its predecessor was the Export Fluctuation Compensation Facility (CFF), which was established in 1963. When a country's export revenue declines or its grain import expenditure increases, resulting in a temporary decrease in international income or an increase in its grain import expenditure, the loan amount is 83% of its share. If both are borrowed at the same time, they shall not exceed 105% of their share. In January 1989, the IMF replaced the CFF with "compensation and emergency loans", with the maximum loan amount being 122% of the share. Among them, the emergency loan and quilt repayment are 40% each, the grain import cost repayment loan is 17%, and the remaining 25% is optionally chosen by China2 to supplement the above two. The loan conditions are that the decline in export earnings or the increase in grain import expenditures should be temporary and caused by reasons beyond the control of the member countries themselves. At the same time, the borrowing country must agree to cooperate with the IMF to implement the balance of payments adjustment plan.

⒊Buffer Stock Financing (BSFF)

Established in May 1969, the purpose is to help primary product exporting countries build buffer stocks to stabilize prices. The IMF believes that primary products designated for buffer stock loans include tin, cocoa, sugar, rubber, etc. Member states can use this loan up to 45% of their share, with a loan term of 3 to 5 years.

⒋Medium-term Facility (also known as Extended Fund Facility)

Established in September 1979, specifically to solve the long-term structural balance of payments deficits of member states, and its The amount of funds required is larger than the loan amount that can be borrowed with a regular loan. The loan conditions are: ⑴ Confirm that the balance of payments difficulties of the member country applying for the loan indeed require a loan with a longer term than an ordinary loan to solve; ⑵ The applicant country must provide the goals of the entire monetary and fiscal economic policies, and within 12 months Detailed description of relevant policy measures to be implemented. And within the next 12 months, a detailed explanation of the work progress and the measures to be taken to achieve the plan goals will be provided to the IMF; (3) The loans will be issued in installments based on the actual implementation of relevant policies by member states to achieve the plan goals. If the borrowing country cannot meet the IMF's requirements, the loan can be stopped. The maximum borrowing amount of this loan can reach 140% of the borrowing country's share, the term is 4-10 years, and the standby arrangement term is 3 years. The total amount of this loan and ordinary loans shall not exceed 165% of the borrowing country's share.

⒌Supplementary Financing Facility

Established in August 1977, totaling US$10 billion, of which oil-exporting countries provided 4.8 billion, with the remaining seven countries and one country 5.2 billion provided. The IMF has signed loan agreements with these countries to use the borrowed funds to cooperate with the IMF's original financing plan and strengthen the provision of loans to countries with serious balance of payments deficits. When a member country encounters a serious international balance of payments, the total borrowing amount has reached the high-end credit portion of the IMF's ordinary loan, and it still needs large amounts and longer-term funds, it can apply for supplementary loans. The loan term is 3-7 years and is repaid once a year. The interest rate for the first three years is equivalent to the interest rate paid by the IMF to the capital provider. The borrowing amount can reach 140% of the member country's share. After the supplementary loan was provided, the one-year loan limit was stipulated in 1981 as 95-115% of the share. Since then, the loan limit has been further reduced to 90-110% in one year, 270-330% in three years, and the cumulative maximum limit is 400-440%.

⒍Trust Fund

Established in 1976, after the IMF abolished the gold clause, it will hold 1% of the gold between June 1976 and May 1980. /6 After selling at the market price, use the profits obtained from the location (the portion of the market price exceeding the official price of US$35) to establish a trust fund to provide loans to low-income developing countries on preferential terms.

⒎Temporary Credit Facility

In addition to establishing fixed loan projects, the IMF can also set up special temporary loan projects as needed, the funds of which do not originate from IMF borrows temporarily. For example, the oil loan set up between 1974 and 1976 was used to solve the imbalance in the balance of payments caused by rising oil prices. The source of funds for oil loans is that the IMF borrows from surplus countries (mainly oil-exporting countries) and then transfers them to deficit countries. The maximum loan amount was set at 75% of the share in 1974, and was increased to 125% in 1975. The loan period is 3-7 years, and a mid-term income and expenditure adjustment plan must also be proposed when applying for a petroleum loan. The oil loan expired in May 1976, and 55 countries in China used this project to obtain loan funds of 6.9 billion SDRs.

⒏Structural Adjustment Facility (SAF)

Established in March 1983, the funds come from the principal and interest repayment of trust fund loans. The loan interest rate is 1.5% and the term is 5- 10 years. The Expanded Structural Adjustment Facility (ESAF) was established at the end of 1987, with the maximum loan amount being 250% of the share.

2. Other business activities of the IMF

⒈Exchange rate supervision and policy coordination

In order to ensure the smooth operation of the international monetary system and ensure the stability of the financial order and the world economy growth, the IMF is inspecting member states to ensure that they cooperate with the Fund and other member states to maintain orderly exchange rate arrangements and establish a stable exchange rate system. Specifically, the IMF requires all member countries to:

⑴ Strive to use their own economic and financial policies to achieve the goal of promoting orderly economic growth, with both reasonable price stability and appropriate care. own situation;

⑵ Strive to promote stability by creating orderly basic economic and financial conditions and a monetary system that does not create abnormal chaos;

⑶ Avoid manipulation of exchange rates or international monetary system to hinder the effective adjustment of the balance of payments or to gain unfair competitive advantages over other member states;

⑷Under the Bretton Woods system, when member states change their exchange rate parity, they must negotiate with the IMF consultation and approval. Under the current floating exchange rate system, member states do not need to seek the consent of the IMF to adjust their exchange rates. However, the IMF's exchange rate surveillance function has not been lost. It still needs to conduct a comprehensive evaluation of members' exchange rate policies. This kind of conduct must consider the adjustment of their domestic and foreign policies to the balance of payments, as well as the achievement of sustained economic growth, fiscal stability, and employment maintenance. horizontal effect. The IMF's exchange rate supervision is not only applied to countries that require support from due IMF loans due to economic weakness or international balance of payments imbalances, but more importantly, to those state-owned enterprises with strong economic strength. The domestic economic policies and international balance of payments of some countries will have a significant impact on the world economy. The IMF can use its activities to make these countries consider the external economic effects of these policies.

⑸The IMF supervises the exchange rate policies of member states on a multilateral basis and on an individual basis. On a multilateral basis, the IMF mainly analyzes the interaction between the balance of payments and exchange rate policies of industrialized countries and determines the extent to which these policies can promote a healthy world economic environment. Multilateral supervision is based on the World Economic Outlook proposed by the Executive Board and the Interim Committee of the Council, emphasizing policy coordination and development of countries that have an important impact on the international monetary system. The IMF should participate in further discussions among major Western industrial countries on the basis of the G-7 summit to promote cooperation among industrialized countries in the international monetary and financial fields and strengthen the coordination of their macroeconomic policies. The supervision of individual countries is mainly through checking whether the exchange rate policies of member states are consistent with the obligations stipulated in Article 4 of the Fund Agreement. The IMF requires member states where they are located to notify the IMF of changes in their exchange rate arrangements, so that the IMF can promptly Provide supervision and coordination.

In addition to supervising exchange rate policies, the IMF should in principle conduct consultations with each member state once a year to evaluate the economic and financial situation of member states2 and the role of economic policies. The purpose of this kind of consultation is to enable the Fund to fulfill its responsibility of supervising member countries' exchange rate policies, and to help the Fund understand the economic development status and policy measures taken by the cooperating countries, so that it can quickly handle member countries' requests for loans.

⒉Creation of Reserve Assets

The IMF formally adopted the Special Drawing Rights plan proposed by the Group of Ten countries at its annual meeting in 1969, and decided to create Special Drawing Rights to supplement the international Insufficient reserves. Special Drawing Rights began to be officially issued in January 1970. Member states can voluntarily participate in the allocation of drawing rights or not. Currently, except for individual countries, all other member states are participants in the account.

The Special Drawing Rights are allocated by the IMF to each participating country according to the share paid by the member country. After the allocation, it becomes the reserve asset of the member country. When a member country has an international balance of payments deficit, the Special Drawing Rights can be used. It can be transferred to another member state to pay off the balance of payments deficit, or used to repay IMF loans.