IMF allocated funds to the account of the Central Bank of BiH

In the evening, on August 23, 2021, the International Monetary Fund (IMF) credited funds to the account of the Central Bank of Bosnia and Herzegovina (CBBH), based on the allocation of Special Drawing Rights (SDR) in the amount of SDR 254,182,273.00.

In accordance with applicable laws and bylaws, the CBBH, as the fiscal agent of Bosnia and Herzegovina, for the a.m. allocated funds, will credit with the corresponding amount of KM 602,540,349.06  the deposit account for IMF transactions – the main account of the BH Ministry of Finance and Treasury.

The Central Bank of Bosnia and Herzegovina will distribute funds on the basis of appropriate instructions from the  BH Ministry of Finance and Treasury, being the account owner.

The IMF has the authority to create unconditional liquidity through the general distribution (allocation) of SDRs to member countries in proportion to their share in the IMF capital, i.e. quotas. Bosnia and Herzegovina’s IMF quota is 0.06%. The previous distribution of SDRs for BH was made in 2009, and it was carried out as a measure to mitigate the effects of the global financial and economic crisis.

In response to the latest crisis caused by the COVID-19 pandemic, the IMF Board of Governors decided, on August 2, 2021, on a new SDR allocation of about SDRs 456 billion, being equivalent to about US$ 650 billion, which was credited to IMF member countries, in SDR currency, to their SDR holdings accounts with the IMF, at certain quotas for each country.

The SDR allocation is not a classic credit arrangement of a country with the IMF. The liability under this allocation consists of monthly calculated costs on the cumulative amount of SDR allocation, which are paid quarterly to the IMF (February, May, August and November). The fee consists of the interest rate for the SDR, increased by 1 basis point (0.01) for the IMF service fee. The obligation to pay the fee is borne by the levels in BH to which the appropriate amount of funds is allocated according to the distribution principle.

Leave a Comment