INTERNATIONAL MONETARY FUND
Establishment and Operation of the Investment Account
Prepared by the Finance Department
(In consultation with other departments)
Approved by Michael G. Kuhn
August 12, 2005
Contents
Page
Executive Summary ...................................................................................................................3
I.
Introduction........................................................................................................................5
II. The Investment Account’s Precursors and Rationale ........................................................5
III. Establishment and Activation of the Investment Account.................................................6
IV. Investment Authority and Range of Eligible Investments.................................................9
V. Investment Strategies and Implementation......................................................................10
VI. Use of the Investment Account’s Earnings......................................................................19
VII. Issues for Consideration...................................................................................................19
Tables
1. Steps to Activate the Investment Account .........................................................................8
Figures
1. Cumulative Bond Portfolio Returns and Probability of Monthly Returns,
1989 2005.......................................................................................................................12
Boxes
1. Precursors to the Investment Account ...............................................................................7
2. Evolving Reserve Assets Management Practices ............................................................15
- 2 -
Annexes
I.
Impact of Investment Account Flows on the Fund’s Income and Financial
Statements ........................................................................................................