Liquidity position: Demand for use of IMF resources remains heavy

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As the Asian crisis continued to unfold during 1998/99, market pressures spread, first to Russia in mid-1998 and then to Brazil toward the end of the year, heightening the demand for IMF resources. The IMF's liquidity position weakened, and the IMF resorted to borrowing: in July 1998 under the General Arrangements to Borrow and again in December 1998 under the New Arrangements to Borrow. It repaid these borrowings in March 1999 after the quota increase under the Eleventh General Review took effect, which substantially increased the IMF's own resources for lending. During December 1998-January 1999, the IMF's liquidity ratio fell to less than 30 percent, about the mini-

Supplemental Reserve Facility, IMF credit outstanding in the General Resources Account rose by SDR 11.0 billion to SDR 60.7 billion at the end of 1998/99.

The liquid resources of the IMF consist of usable currencies and SDRs held in the General Resources Account. Usable currencies, the largest component of liquid resources, are those of members whose balance of payments and reserve positions the IMF considers strong enough to warrant the use of their currencies in financing IMF operations and transactions.

The IMF's usable resources increased sharply toward the end of the financial year as members made quota payments, under the Eleventh General Review, amounting to SDR 46.0 billion. Moreover, three additional members were included on the list of countries whose currencies are considered usable, adding SDR 1.7 billion...

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