IMF governors approve 50% boost in lending resources, no share changes

The International Monetary Fund's governing body has approved a 50% increase in quota resources to be contributed by member countries in proportion to their current IMF shareholding, bringing total quotas to $960 billion, the IMF said on Monday.

2023 12 18T210356Z 1 LYNXMPEJBH0PZ RTROPTP 4 PAKISTAN IMF scaled
FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas//File Photo

Governors representing nearly 93% of the total voting power of the fund voted for the 50% increase the IMF’s executive board recommended last month, exceeding the 85% required. The voting deadline ended on Friday.

The quota increase, which follows years of extensive discussions among members, will become effective by Nov. 15, 2024 once member countries agree to their respective quota changes, which requires legislative approval in many cases.

The decision largely follows a U.S.-backed plan that would enhance IMF lending resources but delay any IMF shareholding increases for China, India, Brazil and other fast-growing emerging market economies.

But the governors asked the IMF to develop possible approaches for a new quota formula by June 2025, in line with the executive board’s recommendation.

The 50% increase in quota funding — equivalent to about $320 billion at current exchange rates — will not increase the fund’s overall lending firepower of about $1 trillion, but would shift the composition to about 70% more permanent resources while reducing reliance on borrowed resources, the IMF said.

IMF Managing Director Kristalina Georgieva called the decision “a strong vote of confidence for the work of the Fund. It will reduce the reliance of the Fund on borrowed resources, restore the primary role of quotas in our lending capacity and reinforce the role of the IMF at the centre of the Global Financial Safety Net,” she said.

Georgieva said the move would strengthen the IMF’s capacity to help “safeguard global financial stability and respond to members’ potential needs in an uncertain and shock-prone world.”

Currently, the IMF relies on bilateral borrowing arrangements and pledges to a crisis lending fund called the New Arrangements to Borrow. The executive board will discuss proposals for reducing the crisis lending fund in early 2024.

Zuzana Murgasova, deputy director of the IMF’s finance department, told Reuters that work on the guidance for a further quota realignment would begin very soon, but declined to provide further details since the discussions were confidential.

“What is really important is that the membership has recognized that this is an urgent priority, and the work will start very soon,” she said.

Murgasova said the governors’ votes were also confidential, and declined to say which country or countries did not approve the quota increase.

More from Qonversations

News

2024 02 19T161001Z 1 LYNXNPEK1I0ES RTROPTP 4 CONGO SECURITY

Escalating violence in eastern Congo threatens regional stability

News

2024 02 17T100826Z 1 LYNXNPEK1G039 RTROPTP 4 URUGUAY DRUGS

Uruguay pleads DEA to help with rising drug violence

News

2024 02 15T224147Z 1 LYNXNPEK1E0VW RTROPTP 4 GREECE LGBT MARRIAGE VOTE

Greece becomes first Orthodox Christian country to legalize same-sex marriages

News

2024 02 16T000736Z 1 LYNXNPEK1F004 RTROPTP 4 GOOGLE EUROPE

Google to launch anti-misinformation campaign ahead of EU elections

Front of mind
Screenshot 2024 02 09 at 10.47.42

How to win elections in Africa – Chike Ukaegbu

Ismail Akwei

Presidential elections in Africa have gone through many cycles since the 1950s when Ghana became the first country […]

Read more
Screenshot 2024 01 21 at 07.33.15 scaled

How China can help revive agribusiness in the Caribbean

Eleanor Sa-Carneiro

Against the backdrop of the Caribbean, Trinidad and Tobago’s Fine Cocoa Company is setting sail into the waters […]

Read more