International Monetary Fund:
Observations on Its Financial Condition
T-NSIAD-98-220, Jul 23, 1998
Pursuant to a congressional request, GAO discussed the International Monetary Fund's (IMF) financial operations and financial reporting, focusing on: (1) what resources IMF currently has available to carry out its operations; and (2) whether IMF's financial condition can be determined from publicly available information. GAO did not take a position on what action the Congress should take on the executive branch's request for about $17.5 million for IMF.
GAO noted that: (1) IMF has a total of about $195 billion in currency holdings in its general resources account that has been provided through quota subscriptions by its 182 members; (2) however, as of July 20, 1998, IMF estimates that only about $130 billion of these funds represent resources that could be used; that is, are from members that are sufficiently strong economically to permit their currencies to be used for IMF operations; (3) of this amount, about $70 billion has already been used to finance credit to IMF members and about $17 billion has been committed for their use; (4) therefore, according to IMF's estimate, only about $43 billion of its $195 billion in currency holdings remain for operations, including lending; (5) further, IMF and Department of the Treasury officials have indicated in public statements that only about $10 billion to $15 billion of the available $43 billion could be used for additional credit to IMF members without leaving IMF seriously short of funds due to IMF's need to maintain certain reserves; (6) these IMF estimates do not take into account the $11.4 billion IMF financing arrangement for Russia that was approved by IMF's Executive Board on July 20, 1998; (7) about $2.9 billion of this $11.4 billion will come from IMF's remaining general currency holdings, and IMF will borrow the other $8.5 billion from 11 member governments that participate in the General Arrangements to Borrow; (8) IMF's available funds are reported in its annual report; however, the report is released six months after IMF's fiscal year ends and, according to IMF and Treasury officials, is of limited use for decisionmaking purposes; and (9) instead, decisionmaking requires the use of IMF's quarterly operational budgets, which are nonpublic.