POLITICS

Dodik: We already have a Decision on the Distribution of the Allocation from IMF

Member of the Presidency of Bosnia and Herzegovina Milorad Dodik confirmed at the press conference in Banja Luka that there is already a decision on the allocation of the funds from the International Monetary Fund for mitigating the consequences of the pandemic.

According to the decision, 38 percent should go to the entity of Republika Srpska, one or two percent to Brcko District and the rest to the Federation of BiH.

“That is the basis on which the distribution should be made or we will get into problems, but if we stick to the agreement we had before, then the situation is like this because the funds are intended for the consequences of the pandemic,” added Dodik.

In the evening, on August 23, 2021, the International Monetary Fund (IMF) credited funds to the account of the Central Bank of Bosnia and Herzegovina (CBBH), based on the allocation of Special Drawing Rights (SDR) in the amount of SDR 254,182,273.00.

In accordance with applicable laws and bylaws, the CBBH, as the fiscal agent of Bosnia and Herzegovina, for the a.m. allocated funds, will credit with the corresponding amount of BAM 602,540,349.06  the deposit account for IMF transactions – the main account of the BH Ministry of Finance and Treasury.

The Central Bank of Bosnia and Herzegovina will distribute funds on the basis of appropriate instructions from the  BH Ministry of Finance and Treasury, being the account owner.

The IMF has the authority to create unconditional liquidity through the general distribution (allocation) of SDRs to member countries in proportion to their share in the IMF capital, i.e. quotas. Bosnia and Herzegovina’s IMF quota is 0.06%. The previous distribution of SDRs for BH was made in 2009, and it was carried out as a measure to mitigate the effects of the global financial and economic crisis.

In response to the latest crisis caused by the COVID-19 pandemic, the IMF Board of Governors decided, on August 2, 2021, on a new SDR allocation of about SDRs 456 billion, being equivalent to about US$ 650 billion, which was credited to IMF member countries, in SDR currency, to their SDR holdings accounts with the IMF, at certain quotas for each country.

The SDR allocation is not a classic credit arrangement of a country with the IMF. The liability under this allocation consists of monthly calculated costs on the cumulative amount of SDR allocation, which are paid quarterly to the IMF (February, May, August and November). The fee consists of the interest rate for the SDR, increased by 1 basis point (0.01) for the IMF service fee. The obligation to pay the fee is borne by the levels in BH to which the appropriate amount of funds is allocated according to the distribution principle.

Leave a Comment