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Imf (Substitution Account)

Volume 29: debated on Thursday 28 October 1982

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33.

asked the Chancellor of the Exchequer what progress is being made within the International Monetary Fund in the most recent discussions for the creation of a substitution account.

The emergence of the multi-currency reserve system has widened the focus of discussion beyond original proposals for a SDR-based substitution account. At the Versailles summit the countries whose currencies comprise the SDR acknowledged the need to maintain the internal and external value of their currencies. This should make SDRs and SDRdominated assets more attractive to both official and private holders. At the same time there is a continuing review within the fund of the role of the SDR and SDRdominated assets in the international monetary system, including the scope for substitution. I believe that increased SDR-dominated reserve holdings could help to sustain the stability of the multi-currency reserve system.