1 

REPORT TO CONGRESS ON FINANCIAL IMPLICATIONS OF 

U.S. PARTICIPATION IN 

THE INTERNATIONAL MONETARY FUND 

Q4 2004 and Q1 – Q3 2005 

This report has been prepared in compliance with Section 504(b) of Appendix E, Title V of the 

Consolidated Appropriations Act for FY 2000. 1 The report focuses exclusively on the financial 

implications of U.S. participation in the International Monetary Fund (IMF) and does not attempt 

to quantify the broad and substantial economic benefits to the United States and the global 

economy resulting from U.S. participation in the IMF. 

As required, the report provides financial information on the net interest income and valuation 

changes associated with U.S. participation in the IMF. The broader context for the financial 

implications of U.S. participation in the IMF and the methodology used in deriving these figures 

have been laid out in previous reports. The methodology is also summarized briefly in the 

footnotes attached to the tables. Reports under Section 504(b) are prepared quarterly and made 

available to the public on the Treasury website: http://www.treas.gov/press/reports.html. 

This report provides quarterly data for the fourth quarter of fiscal year 2004 and the first to third 

quarters of fiscal year 2005. It provides information on U.S. participation in the IMF’s General 

Department as well as information related to U.S. holdings of Special Drawing Rights (SDRs) as 

part of its international reserves and the financial implications of U.S. participation in the SDR 

Department of the IMF.2

Data on the net interest income and valuation changes related to U.S. participation in the IMF's 

General Department during the fourth quarter of fiscal year 2004 and the first to third quarters of 

fiscal year 2005 are provided in Table 1. For comparison purposes, previously-reported data for 

the last three fiscal years are also provided. 

Similarly, data for net interest income and valuation changes related to U.S. participation in the 

SDR Department of the IMF during the fourth quarter of fiscal year 2004 and the first to third 

quarters of fiscal year 2005 are provided in Table 2. The SDR Department methodology has 

been revised from previous reports to reflect actual interest paid and interest received on the net 

SDR position rather than estimates. For comparison purposes, the previous ten years of fiscal 

year data using this revised approach are also provided. 

 

1

 Section 504(b) of Appendix E, Title V of the Consolidated Appropriations Act for FY 2000, Public Law 106-113, 

113 Stat. 1501A-317, requires that the Secretary of the Treasury prepare and transmit to the appropriate committees 

of the Congress a quarterly report on United States participation in the International Monetary Fund (IMF), detailing 

the costs or benefits to the United States as well as valuation gains or losses on the United States’ reserve position in 

the IMF. 

2

 The SDR is an international reserve asset created by the IMF. The SDR is used as a unit of account by the IMF 

and other international organizations. Its value is determined as a weighted average of a basket of currencies -- the 

dollar, euro, pound sterling and yen. The SDR carries a market-based interest rate determined on the basis of a 

weighted average of interest rates on short-term instruments in the markets of the currencies included in the SDR 

valuation basket. 
2

The table footnotes explain the columns shown and provide pertinent information and 

assumptions used in the calculations. 

As shown in Table 1, for the fourth quarter of fiscal year 2004 and the first to third quarters of 

fiscal year 2005, the financial implications of U.S. participation in the General Department 

reflected a net interest income effect of $59 million. The valuation change in the U.S. Reserve 

Position for the fourth quarter of fiscal year 2004 and the first to third quarters of fiscal year 

2005 was $64 million.3 

As shown in Table 2, for the fourth quarter of fiscal year 2004 and the first to third quarters of 

fiscal year 2005, the net interest income effect of U.S. participation in the SDR Department was 

negative $8 million. The valuation change for the second quarter on U.S. SDR holdings was $43 

million.4

Attachments 

 

3

 For an explanation of the methodology used in deriving these figures, see the section on “Calculating the Financial 

Implications of U.S. Participation in the General Department” in the report prepared for the fourth quarter of fiscal 

year 2000, submitted in December 2000 and available at http://www.treas.gov/press/releases/report3073.htm 4

 For an explanation of the methodology used in deriving these figures, see the section on “Calculating the Financial 

Implications of U.S. Participation in the SDR Department” in the report prepared for the fourth quarter of fiscal year 

2000, submitted in December 2000 and available at http://www.treas.gov/press/releases/report3073.htm. 
Table 1 Net Interest Income and Valuation Changes Related to U.S. Participation i

 -- General Department --

U.S. Fiscal Year, Quarterly 

(millions of U.S. Dollars)

Va

(Col 1+2) (Col. 4+5+6) 

 Col. 1 Col. 2 Col. 3 Col. 4 Col.5 Col.6 Col. 7 

2001

Q1: Oct - Dec 00 -$11,949 $0 -$11,949 -$138 $133 $0 -$5 Q2: Jan - Mar 01 -11,378 0 -11,378 -128 139 0 11 Q3: Apr - June 01 -12,389 0 -12,389 -109 115 0 5 Q4: July - Sept 01 -15,632 0 -15,632 -109 105 0 -4 

Total -$484 $492 $0 $7 2002

Q1: Oct - Dec 01 -$15,547 $0 -$15,547 -$87 $105 $0 $18 Q2: Jan - Mar 02 -14,875 0 -14,875 -82 83 0 1 Q3: Apr - June 02 -16,500 0 -16,500 -80 81 0 1 Q4: July - Sept 02 -17,635 0 -17,635 -88 103 0 15 

Total -$337 $372 $0 $34 2003

Q1: Oct - Dec 02 -$18,152 $0 -$18,152 -$79 $97 $0 $18 Q2: Jan - Mar 03 -18,826 0 -18,826 -72 91 0 19 Q3: Apr - June 03 -18,737 0 -18,737 -67 82 0 15 Q4: July - Sept 03 -19,136 0 -19,136 -65 78 0 13 

Total -$283 $348 $0 $65 2004

Q1: Oct - Dec 03 -$16,702 $0 -$16,702 -$65 $78 $0 $13 Q2: Jan - Mar 04 -15,886 0 -15,886 -58 79 0 21 Q3: Apr -June 04 -14,530 0 -14,530 -60 69 0 9 Q4: July -Sept 04 -13,867 0 -13,867 -67 74 0 7 

Total -$249 $300 $0 $50 2005

Q1: Oct - Dec 04 -$12,882 $0 -$12,882 -$73 $82 $0 $9 Q2: Jan - Mar 05 -9,429 0 -9,429 -$56 $88 $0 $32 Q3: Apr -June 05 -9,677 0 -9,677 -$60 $71 $0 $10 

Note: Detail may not add to total due to rounding.

Transactions with the IMF Interest Calculations

Transactions Under U.S. 

Quota (Letter of Credit 

&Transfers of Reserve 

Assets) Cumulative

U.S. Loans to IMF 

(Under SFF, GAB, 

NAB) 

Cumulative

Total U.S. 

Transactions with 

the IMF 

Interest Expense 

Associated with 

Financing U.S. 

Transactions with 

the IMF

Remuneration 

Received by U.S. 

from IMF & 

Refund of Burden 

Sharing

Interest Received 

from IMF Under 

SFF, GAB, and 

NAB 

Net Interest 

Fiscal Year Ended 9/30 Income

Valua

on U

P
Table 2 Net Interest and Valuation Changes Related to U.S. Participation in th

 -- SDR Department --

U.S. Fiscal Year, Quarterly

(millions of U.S. Dollars)

Net SDR Holdings Interest Calculations Valuation 

Fiscal Year Ended 

9/30

Dollar Value of 

SDR Holdings

Dollar Value of 

Cumulative SDR 

Allocation

Net SDR 

Holdings

Interest Income 

on Net SDR 

Holdings

Interest Expense 

Associated with 

Financing 

Cumulative U.S. 

SDR 

Transactions

Net Interest 

Income

Valuation 

Changes 

(Col. 1 - 2) (Col. 4 + 5) 

Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 

2002

Q1: Oct - Dec 01 $10,783 $6,157 $4,626 $34 -$25 $9 -$115 

Q2: Jan - Mar 02 10,809 6,109 4,700 26 -24 3 -36 Q3: Apr - June 02 11,645 6,519 5,127 28 -26 1 315 Q4: July - Sept 02 11,710 6,481 5,229 30 -24 5 -30 

Total $118 -$100 $18 $134 2003

Q1: Oct - Dec 02 $12,166 $6,661 $5,505 $30 -$21 $9 $146 Q2: Jan - Mar 03 11,392 6,731 4,662 27 -16 11 58 Q3: Apr - June 03 11,720 6,864 4,857 21 -15 6 92 Q4: July - Sept 03 12,062 7,005 5,057 20 -16 4 100 

Total $97 -$68 $29 $396 2004

Q1: Oct - Dec 03 $12,638 $7,281 $5,357 $20 -$17 $3 $199 Q2: Jan - Mar 04 12,645 7,228 5,417 21 -17 5 -39 Q3: Apr - June 04 12,659 7,184 5,475 21 -20 1 -33 Q4: July - Sept 04 12,782 7,197 5,585 24 -25 -1 10 

Total $87 -$79 $8 $137 2005

Q1: Oct - Dec 04 $13,628 $7,609 $6,019 $29 -$34 -$5 $319 Q2: Jan - Mar 05 11,565 7,402 4,162 33 -29 3 -163 Q3: Apr - June 05 11,317 7,184 4,134 26 -32 -6 -123 

Note: Detail may not add to total due to rounding. Table has been revised from previous reports to reflect actual interest paid and interest received on net SDR position rather than estima
Table 2 Net Interest and Valuation Changes Related to U.S. Participatio

 -- SDR Department --

U.S. Fiscal Year, Annual

(millions of U.S. Dollars)

Net SDR Holdings Interest Calculations Val

Fiscal Year Ended 

9/30

Dollar Value of 

SDR Holdings

Dollar Value of 

Cumulative SDR 

Allocation

Net SDR 

Holdings

Interest Income 

on Net SDR 

Holdings

Interest Expense 

Associated with 

Financing 

Cumulative U.S. 

SDR 

Transactions

Net Interest 

Income

Va

Ch

(Col. 1 - 2) (Col. 4 + 5) 

Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 C

1995 11,035 7,380 3,655 163 -225 -62 1996 10,177 7,052 3,125 155 -202 -47 1997 9,997 6,689 3,308 123 -179 -56 1998 10,106 6,719 3,387 147 -184 -37 1999 10,284 6,799 3,485 120 -160 -40 2000 10,316 6,359 3,957 144 -227 -83 2001 10,919 6,316 4,604 176 -201 -25 2002 11,710 6,481 5,229 118 -100 18 2003 12,062 7,005 5,057 97 -68 29 2004 12,782 7,197 5,585 87 -79 8 

Total Cost 1995-2004 $1,331 -$1,626 -$295 Average Cost 1995-2004 133 -163 -29 

Note: Detail may not add to total due to rounding. Table has been revised from previous reports to reflect actual interest paid and interest received on net SDR position rath
1 

TABLE 1 

Footnotes to Columns 

Column 1: Total cumulative transactions under the U.S. Quota, including drawings by the IMF under the Letter of Credit (

quota) and the transfers of reserve assets to the IMF (generally 25% of the U.S. quota). Column 2: Total cumulative dollar funding through loans to the IMF made by the U.S. under the Supplementary Financing 

1980), the General Arrangements to Borrow (GAB, in FY1998) and the New Arrangements to Borrow (NAB, in FY1999). the three facilities/arrangements have been repaid. Column 3: Total cumulative U.S. transactions with the IMF (horizontal summation of columns 1 and 2). Column 4: Total interest associated with total cumulative transactions shown in column 3. This includes interest paid on a

borrowing to fund day-to-day transactions under the Letter of Credit and occasional transfers under loan arrangements (SFF

as interest income forgone due to the transfer of reserve assets to the IMF at the time of a quota increase. In order to providLetter of Credit or under loan arrangements, the Treasury borrows from the public via additional issuance in the Treasury m

funds is used as a proxy for calculating the associated interest cost. This portion of the total interest paid enters the U.S. bu

public debt. For purposes of calculating forgone interest on the transfer of reserve assets to the IMF, the SDR interest rate Column 5: The U.S. earns interest on the non-gold portion of its reserve position in the IMF. This interest is called remun

combination with an adjustment by the IMF related to burden-sharing, is paid by the IMF every quarter. If remuneration is to the Exchange Stabilization Fund (ESF) and the ESF transfers the dollar equivalent to the Treasury General Fund. It is rean offsetting receipt from the public. If the United States took payment in dollars (which it does not now do), the payment a decrease in the U.S. Letter of Credit and a counterpart increase in the U.S. reserve position. Column 6: These amounts constitute the interest payments the United States has received on its loans to the IMF under the 

Column 7: Total net interest paid, forgone or received as a result of U.S. participation in the General Department of the IM

Column 8: The U.S. reserve position in the IMF is denominated in SDRs. The valuation gain (if positive) or loss (if negat

exchange rate gain or loss on the reserve position due to changes in the dollar value of the SDR. For example, if the SDR adepreciates, then the dollar value of the reserve position rises and a valuation gain is recorded. This column would also inclosses experienced as a result of U.S. loans under the SFF, GAB and NAB. Column 9: The total of net interest and valuation changes, obtained by summing column 7 and column 8. 
1 

TABLE 2 

Footnotes to Columns 

Column 1: Total stock of U.S. holdings of SDRs measured at the end of period, converted into dollars at the end of period e

IMF. Column 2: Total stock of U.S. SDR allocations measured at the end of period, converted into dollars at the end of period ex

U.S. SDR allocations have been constant since 1981, changes in dollar value of SDR allocations reflect only exchange rate 

Column 3: Total stock of U.S. SDR holdings minus allocations measured from end of period (Column 2 minus Column 3), 

at the end of period exchange rate. Column 4: Net interest earned on SDR holdings. Derived by subtracting actual charges on SDR allocations from actual int

holdings. Column 5: Net effect on U.S. borrowing costs of cumulative net SDR holdings, derived by multiplying the dollar equivalenSDR holdings by the average cost of funds rate. Interest is calculated on the basis of end-quarter holdings and compounde

Column 6: Net interest income (Column 5 plus Column 6). 

Column 7: The valuation change refers to the gain or loss over the period on the reserve position due to changes in the doll

For example, if the SDR appreciates/dollar depreciates, then the impact on the dollar value of U.S. holdings of SDRs is posgain is recorded. The change is calculated by subtracting the beginning of period dollar value of SDR reserves from the sam

converted to dollars using the end of period exchange rate. This isolates changes due to exchange rate movements from cha

transactions over the period. Column 8: The total net interest and valuation changes (sum of Columns 7 and 8).