Operating a Stabilization Mechanism
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The Group approved the concept of a stabilization mechanism at the Mid Term Meeting in May 1983. This paper was prepared by the CGIAR Secretariat to describe the operations of the mechanism, and seek approval of steps necessary to create it during 1984. The purpose of the mechanism was to protect centers against the impact of variations in exchange rates of donor pledges in currencies other than the US dollar, and against uncertainties with respect to levels of inflation and the movement of exchange rates for currencies in which expenditures are made. The paper solicited support by donors in addition to the World Bank, which had expressed its willingness to provide initial funding of $2.5 million for the mechanism.