Decision XIV/40: Fixed-Exchange-Rate Mechanism for the replenishment of the Multilateral Fund

The Fourteenth Meeting of the Parties decided in Dec. XIV/40:

Having considered the final report by the Treasurer and the Secretariat of the Multilateral Fund on the implementation of the fixed-exchange-rate mechanism and its impact on the operations of the Fund prepared in response to Decision XIII/4,

Reaffirming the purpose and objective of the fixed-exchange-rate mechanism as set out in paragraph 2, Decision XI/6 to promote the timely payment of contributions, and to ensure that there is no adverse impact on the level of available resources of the Multilateral Fund,

Mindful of the conclusions contained in the revised report prepared at the request of the twenty-second Meeting of the Open-ended Working Group,

Recalling that Decision XI/6 established the fixed-exchange-rate mechanism on a trial basis for the 2000-2002 replenishment period,

1. To direct the Treasurer to extend the fixed-exchange-rate mechanism for a further trial period of three years;
2. That Parties choosing to pay in national currencies will calculate their contributions based on an average United Nations exchange rate for the twelve-months preceding the replenishment period. This average will be based on the twelve-month period immediately preceding the first day of the meeting of the Parties during which the replenishment level will be decided. Subject to paragraph 3 below, Parties not choosing to pay in national currencies, pursuant to the fixed-exchange-rate mechanism, will continue to pay in United States dollars;
3. That no Party should change the currency selected for its contribution in the course of the triennium period;
4. That only Parties with inflation rate fluctuations of less than 10 per cent, as per published figures of the International Monetary Fund, for the preceding triennium will be eligible to utilize the mechanism;
5. To urge Parties to pay their contributions to the Multilateral Fund in full and as early as possible in accordance with paragraph 7 of Decision XI/6;
6. To agree, if the fixed-exchange-rate mechanism is to be used for the next replenishment period, that Parties choosing to pay in national currencies will calculate their contributions based on an average United Nations exchange rate for the six-month period commencing 1 July 2004.