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Australia and the International Financial Institutions

Program 1.2 outlined various payments made by the Treasury to the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund (IMF) and the World Bank Group (WBG). This appendix addresses the legislation that requires further reporting on the IMF and the WBG for 2017-18. In particular:

  • Section 10 of the International Monetary Agreements Act 1947, which requires reporting on the operations of the Act and of the operations, insofar as they relate to Australia, of the Articles of Agreement of the IMF and the International Bank for Reconstruction and Development (IBRD) during each financial year; and
  • Section 7 of the International Bank for Reconstruction and Development (General Capital Increase) Act 1989, which requires reporting on the operations of the Act during each financial year.

The Treasury is responsible for managing the Australian Government’s shareholdings with the International Financial Institutions. The Department of Foreign Affairs and Trade (DFAT) has further interactions relating to the Government’s aid program (see DFAT annual report for information).

The IMF and the WBG publish annual reports on their operations and provide information at
www.imf.org and www.worldbank.org.

Australia and the International Monetary Fund


The purposes of the IMF (set out in Article I of its Articles of Agreement) are to:

  • promote international monetary cooperation;
  • facilitate the expansion and balanced growth of trade, contributing to high levels of employment and real income;
  • promote exchange rate stability and avoid competitive devaluation;
  • assist in the establishment of a multilateral system of payments and in the elimination of foreign exchange restrictions that hamper the growth of world trade;
  • make resources available to members to reduce the costs of balance of payments adjustments.

Australia’s representation at the International Monetary Fund

Australia interacts with the IMF through:

  • the IMF Board of Governors;
  • the International Monetary and Financial Committee (IMFC);
  • the IMF Executive Board;
  • the IMF’s Article IV consultation on Australia’s economic developments and policy.
Board of Governors

The Board of Governors is the highest authority within the IMF. It consists of one governor and one alternate governor for each of the 189 member countries. Australia is represented on the Board of Governors by the Treasurer of the Commonwealth of Australia. The Secretary to the Treasury is Australia’s Alternate Governor. Governor’s votes on IMF resolutions during 2017‑18 are noted in Table 7.

Table 7: Australian Governor’s votes on IMF resolutions

Resolution title


Australian Governor’s vote

2021 Annual Meetings

10 April 2018


Direct Remuneration of executive Directors and their Alternates

12 September 2017



International Monetary and Financial Committee

The IMFC advises the Board of Governors on the functioning and performance of the international monetary and financial system, but does not have a decision-making role.

IMF Executive Board, Executive Director and constituency office

The IMF Executive Board conducts the day-to-day business of the IMF and determines matters of policy under the overall authority of the Board of Governors.

Australia belongs to a constituency which in 2017-18 also included Kiribati, the Republic of Korea, Marshall Islands, Federated States of Micronesia, Mongolia, Republic of Nauru, New Zealand, Palau, Papua New Guinea, Samoa, Seychelles, Solomon Islands, Tuvalu, Uzbekistan and Vanuatu.

As at 30 June 2018, Australia held around 1.34 per cent of the total voting power at the IMF. The constituency, as a whole, held around 3.9 per cent.

By agreement between constituency members, the staffing of Australia’s constituency office rotates among constituency members. As at 30 June 2018, the constituency’s Executive Director position was held by Mr Hohyun Jang of the Republic of Korea, while Australia is represented by an Alternate Executive Director, Ms Christine Barron. Under the agreed rotation arrangements, Australia will assume the constituency’s Executive Director position from 1 November 2018.

Australia’s Article IV consultation

In accordance with Article IV of its Articles of Agreement, the IMF conducts regular consultations with the authorities of member countries on economic policies and conditions. The IMF’s 2017 Article IV consultation with Australia included a visit to Australia in November 2017 during which IMF staff met with the Treasurer, senior Treasury officials, the Governor and other senior officials of the Reserve Bank of Australia, representatives of other government agencies, the business community and unions. The 2017 Article IV Report on Australia was released on 20 February 2018.

Australia’s quota in the International Monetary Fund and financial transactions

Australia’s quota in the International Monetary Fund

A member’s ‘quota’ is its allocated shareholding in the IMF, which broadly reflects its weight in the global economy. Australia’s quota at 30 June 2018 was 6,572.4 million Special Drawing Rights (SDR) (equivalent to A$12,492.7 million at 30 June 2018). Part of Australia’s quota is held in reserve by the IMF in SDRs and gold. Part is held in Australia by the RBA in a combination of non-interest bearing promissory notes and cash amounts in Australian dollars.

Australia’s financial transactions with the International Monetary Fund

Australia conducts a range of financial transactions to manage its obligations with the IMF. Transactions in 2017-18 were all completed in a timely and efficient manner. They are described in the following sections, on a cash basis.

Special Drawing Right charges, interest and assessment fee

The SDR is an international reserve asset created by the IMF to supplement the official reserves of member countries. Its value is based on a basket of five international currencies (the US dollar, euro, Japanese yen, pound sterling and the Chinese renminbi).

Australia’s cumulative allocation of SDRs at 30 June 2018 was around SDR 3.1 billion while our actual SDR holdings were around SDR 2.9 billion. Australia’s SDR allocation is held by the RBA, having been sold to the RBA by the Commonwealth in exchange for Australian dollars. The IMF levies charges on the SDRs that have been allocated to each member and pays interest on the SDRs that are held by each member. In 2017 18, the Australian Government paid charges of SDR 20.9 million (A$38.6 million) on net cumulative allocations. During this period the RBA received SDR 19.2 million (A$35.4 million) in interest from the IMF on Australia’s SDR holdings.

In addition, the IMF levies an annual assessment fee to cover the cost of operating the SDR department at the Fund. This is determined according to participants’ net cumulative SDR allocations. Australia’s annual assessment fee for the IMF financial year ending 30 April 2018 was SDR 51,087 (A$96,536).


Remuneration is interest earned on quota resources held by the IMF. In 2017-18, Australia received SDR 781,496 (A$1,455,358) in remuneration.

Maintenance of value

The SDR value of the part of Australia’s IMF quota held in Australian dollars changes as the exchange rate between the Australian dollar and the SDR fluctuates throughout the year.

Under the IMF Articles of Agreement, members are required to maintain the SDR value of their quota through a ‘maintenance of value’ adjustment (that is, a payment or receipt as necessary) following the close of the IMF financial year on 30 April. For the IMF 2017-18 financial year, the Australian dollar depreciated against the SDR. As a result, the 2017-18 maintenance of value adjustment involved a payment from Australia to the IMF of around A$405 million.

Table 8: Transactions with the IMF

Amount in SDRs

Amount in A$

Total interest received on Australia’s SDR holdings(a)



Total remuneration received for Australian holdings at the IMF



Total charges paid on Australia’s SDR allocation



Annual Assessment Fee paid to SDR department



Maintenance of Value transaction for 2017-18


(a) Interest on SDR holdings is paid to the RBA, not to the Treasury.

Lending-related transactions and Australia’s reserve position in the IMF

The IMF manages its lending of quota resources through the Financial Transactions Plan (FTP). This is the mechanism through which the IMF selects the currencies to be used in IMF lending transactions. It also allocates the financing of lending transactions among members. Only currencies of IMF members with sufficiently strong balance of payments and reserve positions — such as Australia — are selected for use in the FTP.

Table 9 provides details of individual FTP transactions and the resulting reserve position at the IMF.

Table 9: Australia’s reserve tranche position in the IMF











Reserve tranche position as at 30 June 2017 (a)



FTP payments

3 August 2017

Transfer to IMF Investment Account



23 April 2018

FTP resources used by the IMF to meet NAB repayments subject to currency shortfalls



22 June 2018

FTP Loan to Argentina



FTP receipts

Total Repayments



Reserve tranche position as at 30 June 2018



(a) Because Australia’s reserve tranche position is denominated in SDRs and AUD/SDR exchange rates vary during the year, when expressed in Australian dollars the closing position does not exactly equal the summation of the opening position and transactions during the year.

FTP transactions (and any transfers for administrative purposes) directly impact on Australia’s reserve position at the IMF. In 2017-18, the amount of Australia’s reserves held by the IMF increased from SDR 224.9 million to SDR 477.5 million.

The IMF also maintains borrowing arrangements — including the New Arrangements to Borrow (NAB) — with several member countries that can be drawn upon to supplement the IMF’s quota resources, if needed. In 2017-18 the IMF did not call on Australia for NAB resources.

During 2017-18, Australia received total NAB repayments of SDR 143.1 million (A$260.1 million).

Table 10: Australia’s NAB transactions











Total NAB loans (payments)



Total NAB receipts (repayments)



Net NAB payments for 2017-18



The Australian Government earns interest on any money lent under the NAB.For 2017-18, the Australian Government received interest payments on its NAB loans of SDR 2.0 million (A$3.6 million).