InternationalÂ Â Â Monetary Fund reviewed upward its income outlook for the financial year ending April 2010.Â A statement issued last week said,
â€œThe Executive Board of the International Monetary Fund (IMF) has completed its midyear review of the Fundâ€™s income position for the financial year ending April 30, 2010 (FY 2010).Â
The updated outlook for FY 2010 net operational income is SDR 440 million (about US$688 million), compared with SDR 290 million (about US$453 million) envisaged at the beginning of the financial year.
The Fundâ€™s income outlook for FY 2010 has improved mainly as a result of higher projected lending income and lower expenditures in SDR terms, which in part reflect current higher U.S. dollar/SDR exchange rates.
The actual outcome remains subject to considerable uncertainty related to the timing and amounts of disbursements under current arrangements with member countries, as well as potential new arrangements and the performance of the Investment Account.
Following the Executive Boardâ€™s decision in September 2009 to commence gold sales in a volume strictly limited to 403.3 metric tons to finance the Fundâ€™s new income model and to boost concessional lending capacity , 212 metric tons were sold in October and November.
The gold sales have yielded profits of about SDR 3 billion (about US$4.7 billion).
A central element of the new income model involves the investment of the gold profits in an endowment to generate income on a sustainable long-term basis. The new income model, which includes a broadening of the Fundâ€™s investment authority, was approved by the Board of Governors in 2008 and the final approval process by member countriesâ€™ domestic legislatures remains in progress.
In completing the midyear review, the Executive Board decided to leave the rate of chargeâ€”the interest rate the IMF charges member countries for non-concessional IMF creditâ€”unchanged at 100 basis points above the SDR interest rate for FY 2010.â€
Meanwhile the IMF is seeking views from the public on the matter of financial sector taxation as part of a study of the issue requested by the G-20.
At the September 2009 G-20 Leaders Summit in Pittsburgh, the IMF was asked â€œto prepare a report for our next meeting with regard to the range of options countries have adopted or are considering as to how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system.â€
Â The G-20 request came in the context of an international effort to define a policy response to spur recovery from the current global financial crisis and to prevent future crises.
In response to this request, IMF staff is conducting a wide-ranging study of financial sector taxation with the intent of presenting an initial analysis to the G-20 finance ministers in April 2010. For the review, we would like to obtain external stakeholdersâ€™ views on the potential usefulness and impact of various approaches to financial sector taxation.