Definition: Early repurchase expectation

Category: IMF terminology

The expectation of repurchase (repayment) in advance of its originally scheduled due date. According to the International Monetary Fund (IMF) Articles of Agreement, a member is normally expected to repurchase its currency (make repayment of usable currencies) as its balance of payments and reserve positions improve. The current early repurchase policy has been in effect since June 1979 and establishes amounts expected to be repurchased taking into account the level of a member’s reserves and their growth, as well as other parameters. A separate repurchase expectation applies to purchases made under the Supplemental Reserve Facility and the Contingent Credit Line. Such repurchases are expected one year before they become obligatory, except that at the request of the member the International Monetary Fund (IMF) may decide to extend the expectation period by up to one year, though not beyond the due date. http://www.imf.org/external/np/exr/glossary/showTerm.asp