FOR PRI] SS No. 297
STATEMEFT BY THE PI -L MINISTER AND
ACTING TR-. SUTRECR
IPTRKAUTIONAL MONI2TA. RY FUND
INCR-ASE TV AUSTRALIAN QUOTA
The Prime Minister and ' Icting Treasurer said
today that Australia had formally consented to an increase
of % 0100 million in its quota in the International Monetary
Fund and had now taken steps to make the necessary subscription.
The increase in Australia's quota from
8400 million to $ 500 million was approved by Parliament
in May this year and is part of a general increase of
per cent in the quotas of all member-countries of the
Fund. To secure this higlher quota, Australia needs
to make a corresponding su'. scription to the Fund of
$ 100 million of which $ 25 million is payable in gold and
the remainder in Australian currency. The gold subscription
of 825 million ( L~ A1l. 2 million) was paid to the Fund on
Wednesday, 29th September. The Australian currency portion
takes the form of a non-negotiable note whaich enables the
Fund, in certain circumstances, to use Australian currency
in its transactions. The gold payment to the Fund involves a corresponding
fall in Australia's holdings of gold and foreign exchange.
On the other hand, the enlarged quota will increase Australia's
drawing rights in the Fund ( our second-line reserves) from
$ 525 million to $ 650 million. The increase in the quota
will become effective when members having not less than
two-thirds of the total quotas in the Fund have consented
formally to their quota increases. This requirement is
expected to be fulfilled in the near future.
The Prime Minister added that one-third of the
gold required for this transaction had been provided from
-2
the Reserve Bank's gold holdings and that the Reserve Bank
had utilised portion of its sterling and dollar holdings to
purchase the remairning two-thirds in equal proportions from
the United Kingdom and the United States. In deciding to
adopt this course, the Government had been influenced by
the fact that Australia's gold holdings were relatively modest
and that the Fu~ nd is prepared to make arrangements to mitigate
the effects on the two reserve currency countries of sales of
gold which they might make to other countries for purposes
of the general quota increases.
Canberra, A. C. T.
October, 1965.