Impact for the Bank of the move by the IMF to strengthen its financial resources

Question discussed at the 2009 general meeting

Like the vast majority of central banks, the Bank, pursuant to Article 9 of its Organic Law, implements the international monetary cooperation agreements on behalf of the State, in particular the Bretton Woods Agreements establishing the IMF. To this end, the Bank benefits from a State guarantee against any loss incurred as a result of these operations.

These provisions are reflected at the level:

  • of the balance sheet, by means of recognition under asset sub-item 2.1 "Receivables from the IMF" and under liabilities item 8 "Counterpart of special drawing rights allocated by the IMF";  of the income statement, by means of the recognition of interest and foreign exchange rate gains or losses on transactions in SDR.
  • Based on the current debate (March 2009) regarding the strengthening of the IMF’s financial resources, Belgium’s contribution is set to be between SDR 4 and 5 billion. It should be noted that Belgium’s current IMF quota stands at SDR 4.6 billion (EUR 5.1 billion at year-end 2008 rate of exchange).

This increase in the IMF’s resources will only have an impact on the Bank’s balance sheet and results when the Fund actually borrows assets from the National Bank. These borrowings will be identical to the transactions which the Bank is already carrying out with the IMF at present. They will possibly replace other remunerated assets with, in this case, an opportunity cost equal to the difference between the return on these assets and the return on SDR