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External Relations | Relations with IMF

Relations with the International Monetary Fund

The former Socialist Federative Republic of Yugoslavia was one of the participants at the United Nations Monetary and Financial Conference at Bretton Woods, N.H, in July 1944 as well as one of the founding countries of the International Monetary Fund (IMF) and the World Bank (WB). Since its foundation, the IMF has granted the SFRY 12 stand-by arrangements. The period between 1980 and 1991 saw the most intensive cooperation between the two parties. During this time the IMF has made seven stand-by arrangements with the SFRY, totalling SDR 3.5 billion (of which 2.7 billion was disbursed). The first financial arrangement with the IMF, worth USD 9 million was reached in 1949, whereas the latest arrangement, which was signed on  March 16th 1990 amounted to SDR 460 million.

On December 14th 1992, the IMF Executive Board of Directors recognized the disintegration of the SFRY and in line with this, its membership rights were closed. At the same time, the decision was brought on the conditions that the former Yugoslavia’s successor states had to meet in order to join the IMF and come into their rightful succession share in this institution. The successor states in question are Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, Slovenia and the FR Yugoslavia. The Federal Republic of Yugoslavia in the IMF came into the possession of 36.52% of assets and liabilities of the former federal state.

Decision on Membership on December 20th 2000

On  December 20th 2000, the IMF Board of Directors brought a decision (Press Release No. 00/75 of  December 20th 2000), coming into effect retroactively on  December 14th 1992, that the FR Yugoslavia has met the necessary preconditions for joining this institution.

On the very same day the IMF Board of Directors approved the FR Yugoslavia a loan equivalent to SDR 116.9 million, under the IMF’s policy on Emergency Post-Conflict Assistance in order to support the country’s stabilization programme and reconstruction of the federal institutions and administration. The FR Yugoslavia channelled those funds to repay the loan for bridging the time gap, in the amount of SDR 101.1 million, that Switzerland and Norway had kindly granted to the FR Yugoslavia for the purpose of settling its obligations towards the IMF.

On  June 11th 2001, the IMF Executive Board of Directors approved a Stand-by Arrangement in the amount of SDR 200 million, as further support to the Government’s economic programme. Disbursement of funds was conditioned upon successful implementation of the agreed Stand-by Arrangement. The total amount of granted funds has been disbursed through four equal tranches. Stand-by Arrangement provided a basis for conducting negotiations on Serbia and Montenegro’s debt relief with Paris Club creditors. The disbursed funds were repaid between March 2004 and May 2006.

Successful implementation of the two previous financial arrangements, as well as the agreed economic programme for stabilization and structural reforms for the period 2002-2005, ensured to the Republic of Serbia a three-year financial arrangement with the IMF, called Extended Facility Arrangement. This arrangement, worth SDR 650 million, was concluded on  May 13th 2002. Disbursement of funds was conditioned upon compliance with the agreed performance criteria and implementation of structural reform measures. Six half-annualy reviews and the IMF Board of Directors positive assessments of the results achieved in implementing economic and financial policies, allowed disbursement of the total amount granted under the Extended Facility Arrangement in 12 tranches. The last tranche was drawn in February 2006. 

Republic of Serbia Continued IMF Membership of the State Union Serbia and Montenegro

After the Republic of Montenegro became an independent state, the Republic of Serbia continued the international and legal personality of the State Union of Serbia and Montenegro, and the membership of the State Union in international financial organizations.

The IMF has confirmed on  July 21th 2006 (Press Release No. 06/161 ), the continuity of the Republic of Serbia in respect of the State Union of Serbia and Montenegro, and has also confirmed that the Republic of Serbia continues membership with the existing quota of SDR 467,7 million and all rights and obligations arising from such membership.

In the period 2000-2006, the funds approved under the three financial arrangements (Emergency Post-Conflict Assistance, Stand-by Arrangement and Extended Facility Arrangement), totalling SDR 966.9 million, significantly supported implementation of economic reforms, macroeconomic stability and stable growth rates in the Republic of Serbia. The repayment of the first two arrangements was effected on time.

The stabilization of the country’s financial position and further increase in foreign exchange reserves provided conditions for the National Bank of Serbia to effect, in agreement with the IMF, early repayment of funds granted under the three-year Extended Facility Arrangement in the amount of SDR 650 million. The last instalment was repaid on  March 15th 2007, upon which all financial obligations towards this international institution were settled.

The cooperation between the Republic of Serbia and the IMF is conducted through regular  consultations as defined by the Article IV of the IMF Articles of Agreement, based on which the IMF assesses the country’s economic situation and adequacy of its economic policy measures.

See More...
Aide Mémoire by the IMF Mission, 9 February 2012
Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding, September 16, 2011
Aide Mémoire 26 May 2011
Letter of Intent of the Government of Serbia, 21 March 2011
Press Release No. 10/513, December 22, 2010
Press Release No. 10/265 - June 28, 2010
Letter of Intent and Tehnical Memorandum of Understending, June 28, 2010
Completion of the Second Review Under Stand-By Arrangement, Press Release No.09/481, December 23, 2009
Aide Mémoire - Second Review under the Stand-by Arrangement, 1 September 2009
Press Release No. 09/169, May 15, 2009
Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding, April 30, 2009
Press Release No. 09/12, January 16, 2009
Letter of Intent, Memorandum of Economic and and Financial Policies, and Technical Memorandum of Understanding, December 25, 2008
Article IV Consultation
Extended Financial Arrangement
Stand-by Arrangement