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International Monetary Fund

. Income Generated Under Different Scenarios of Credit Outstanding and Precautionary Balances 3. Income Generated from Changes in the Margin Under Different Scenarios for Credit Outstanding 4. Savings Generated by Changes in the Rate of Remuneration Under Different Scenarios for Credit Outstanding 5. Slowing the Pace of Reserve Accumulation 6. Closing the Income Gap Figures 1. Average SDR Interest Rate, Basic Rate of Charge, and Rate of Remuneration Boxes 1. The Rule on the Rate of Charge and Surcharge Income 2. Trends in Fund Credit Outstanding 3

International Monetary Fund

projected at the start of the year to be sufficient to achieve a net income target of SDR 188 million, after paying administrative expenses of SDR 646 million ( Table 1 ). These projections were updated at the mid-year review and again following the early repayments by Argentina and Brazil. 5 Box 1. The Rule on the Rate of Charge and Surcharge Income The Rate of Charge The Fund adopted Rule I-6(4) to provide objective guidance for determining the rate of charge on the use of Fund resources and an appropriate margin to protect the Fund’s income position against the

International Monetary Fund

SDR 1.8 billion (see Table 1 ) . 4 Key factors affecting the updated projections are as follows: Lending income: Operational lending income (margin, service charges, and commitment fees) is estimated at SDR 957 million, about SDR 11 million or 1 percent lower than the earlier estimate. Surcharge income is now projected at SDR 1.4 billion, some SDR 66 million or 4 percent below the initial estimate. Each of these variables is discussed further below: Margin income has been revised downwards by SDR 28 million reflecting a small decline in projected average

International Monetary Fund
This paper provides the basis of the Executive Board's annual review of the Fund's income position, the burden-sharing mechanism, and the system of special charges, and makes proposals for the rate of charge in FY07.
International Monetary Fund
FY 2014 net income, including surcharges, is projected at SDR 2.7 billion. Lending income remains high, while investment income continues to be constrained by the historically low global interest rates.
International Monetary Fund
This paper puts forward a number of measures which, if implemented, would eliminate the income gap in FY07. However, these measure still leave a large financing gap moving forward. Therefore, further work is needed to examine mechanisms for financing the Fund’s operations in the medium-term in a manner that ensures that the Fund has a sound financial basis to operate without relying on sharp growth in lending.
International Monetary Fund. Finance Dept. and International Monetary Fund. Legal Dept.

also increased commitment fee income for FY 2018. 4 Surcharge income is almost SDR 200 million lower, with about two-thirds arising from the advance repurchases made during the year, and the remainder attributable to delays in new large disbursements. Investment income is projected to be SDR 101 million compared with SDR 351 million projected in April 2017, mainly reflecting the impact on the Endowment Subaccount of the weaker US dollar against the SDR : The Fixed-Income Subaccount (FI) : Full year returns from the subaccount are now projected at about SDR

International Monetary Fund. Finance Dept. and International Monetary Fund. Legal Dept.
The Fund’s total net income for FY 2018 is projected at about SDR 0.7 billion, broadly in line with the April 2017 estimate. The projections for total lending income are broadly unchanged. Most sources of lending income are lower, reflecting a lower level of credit outstanding as a result of advance repurchases and delayed disbursements. However, projected commitment fee income is higher following the early cancellation of a large FCL arrangement in November 2017. The paper recommends that GRA net income of SDR 0.7 billion for FY 2018 (excluding projected income of the gold sales profits-funded Endowment Subaccount) be placed to the special and general reserve. After the placement of GRA FY 2018 net income to reserves, precautionary balances are projected to reach SDR 17.4 billion at the end of FY 2018. The paper further proposes to transfer currencies equivalent to the increase in the Fund’s reserves from the GRA to the Investment Account. The paper also revisits options for the allocation of net income between the special and general reserve, and proposes that net income be allocated equally between the special and general reserve. In line with the recent Board discussion of a framework for guiding future payouts from the Endowment Subaccount, the paper presents a detailed proposal, which includes delaying payouts for three years to protect the real value of the Endowment. The paper also recommends that the margin for the rate of charge for the period FY 2019–2020 be kept unchanged at 100 basis points. The margin will again be set under the exceptional circumstances clause, as non-lending income continues to be constrained by the low interest rate environment and lending income will be used to finance a portion of the Fund’s non-lending activities. The projections for FY 2019 and FY 2020 point to a net income position of SDR 0.4 billion and SDR 1 billion, respectively. These projections are subject to considerable uncertainty and are sensitive to a number of assumptions.