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52-year-long Indebter Turkey to End its Debt to IMF on 14 May

Apr 27, 2013 12:31 IST

Turkey Treasury Undersecretariat on 26 April 2013 announced that it would close the debt chapter with IMF (International Monetary Fund) by refunding 422.1 million US dollars of capital as part of its 19th Stand-by. This will end Turkey’s 52 years long indebter category from IMF.

IMF was established in 1944 for economic cooperation at the UN meeting in the United States. At present IMF has 188 members registered with it. Turkey became the part of IMF in 1947 and till date has been successful in completing only two of the 19 stand-by deals. As per the new IMF regulation that was agreed in 2010, Turkey’s quota was increased to 4.6 billion SDRs and will now be the 20th country in the highest quota share within IMF. At present Turkey is ranked 32nd in the listing. Turkey will be performing as the Director within IMF from 2014 to 2016 and 2018 to 2020.

Record of Turkey's Debt Stock in IMF

Year

Debt in SDR (Special Drawing Rights)

2002

16.2 billion SDR

2005

10.2 billion SDR

2008

5.5 billion SDR

2010

3.6 billion SDR

2011

1.8 billion SDR

2012

562,109,622 SDR


Special Drawing Rights (SDRs)

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. With a general SDR allocation that took effect on 28 August  and a special allocation on 9 September 2009, the amount of SDRs increased from SDR 21.4 billion to around SDR 204 billion (equivalent to about $310 billion, converted using the rate of 20 August 2012).

Under its Articles of Agreement (Article XV, Section 1, and Article XVIII), the IMF has the power to allocate SDRs to member countries in proportion to their IMF quotas. Such an allocation provides each member with a costless, unconditional international reserve asset. On this allocated asset reserve interest is neither earned nor paid. However, if a member's SDR holdings rise above its allocation, it earns interest on the excess. Conversely, if it holds fewer SDRs than allocated, it pays interest on the shortfall.

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