Washington, DC: On December, 2023, the Board of Governors of the International Monetary Fund (IMF) concluded the 16th General Review of Quotas and approved an increase of IMF members quotas by 50 percent (SDR 238.6 billion, or US$320 billion), which will bring total quotas to SDR 715.7 billion (US$960 billion). [1] When the voting deadline ended on December 15, 2023, Governors representing 92.86 percent of the total voting power had cast votes in favor of the Resolution, exceeding the 85 percent required.
The Board of Governors’ Resolution, which is based on a recommendation by the IMF’s Executive Board from November 7 (see Press Release No. 23/383), also provides guidance on the size of the IMF’s lending capacity and the mix of resources. Specifically, the Resolution envisages maintaining the IMF’s current lending capacity through a combination of the approved increase in quota resources and reduced reliance on borrowed resources. When the quota increase becomes effective, borrowed resources comprising the New Arrangements to Borrow (NAB) would be reduced and the Bilateral Borrowing Agreements would be phased out. Proposals for a reduction in the size of the NAB and transitional arrangements for maintaining access to Fund borrowing will be discussed by the Executive Board in early 2024 following consultations with creditors.
“I would like to express my gratitude to the Board of Governors for successfully concluding the 16th General Review of Quotas, resulting in a fifty percent increase of the Fund’s permanent resources. The overwhelming support from our membership for this decision is 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 center of the Global Financial Safety Net. It will also strengthen the IMF’s capacity to help safeguard global financial stability and respond to members’ potential needs in an uncertain and shock-prone world.” IMF Managing Director Kristalina Georgieva said. “I look forward to the membership’s timely implementation of this important agreement.”
Following the Board of Governors’ approval, the next step is for member countries to consent to their respective quota increases. Members have committed to expeditiously complete this step by the deadline of November 15, 2024. In many cases this involves legislative approval.
The Executive Board also recognized and informed the Board of Governors of the urgency and importance of quota share realignment to better reflect members’ relative positions in the world economy, while protecting the quota shares of the poorest members. In this context, the Board of Governors asked for work to develop, by June 2025, possible approaches as a guide for further quota realignment, including through a new quota formula, under the 17th General Review of Quotas.
ANNEX
The Board of Governors, the highest decision-making body of the IMF, consists of one governor and one alternate governor for each member country. The Governor and Alternate Governor are appointed by the member country and the Governors are usually ministers of finance or governors of the central bank. All powers of the IMF not conferred directly to the Board of Governors, the Executive Board or the Managing Director, are vested in the Board of Governors. The Board of Governors may delegate to the Executive Board powers not conferred directly to the Board of Governors by the Articles, and has done so. The Board of Governors normally meets once a year.
The Executive Board (the Board) is responsible for conducting the day-to-day business of the IMF. It is currently composed of 24 Executive Directors, who are elected by a member or a group of member countries. The Managing Director, who serves as Chair of the Executive Board, is the chief of all operating staff of the IMF, and conducts the ordinary business of the Fund under the direction of the Executive Board. The Executive Board operates in continuous session and meets as often as the business of the Fund requires. In carrying out its responsibilities, the Board works largely on the basis of recommendations made by management as set forth in papers prepared by IMF staff.
Quotas are the building blocks of the IMF’s financial and governance structure. Each member is assigned a quota when it joins the Fund and is required to make its quota subscription payment in full. Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account, and reviewed at regular intervals. An individual member country’s quota broadly reflects its relative position in the world economy. Quotas play a key role for the voting power of members in IMF decision making bodies, members’ access to Fund financing, and a member’s share in a general allocation of SDRs.
New Arrangements to Borrow: The New Arrangements to Borrow (NAB) is a standing set of credit arrangements under which the participants (member countries and institutions) commit to provide supplementary resources to the IMF when available quota resources are low relative to member countries’ demand for IMF financial support. The NAB constitutes the second line of defense after quotas. Currently, there are 40 participants that contribute an aggregate of SDR 364 billion, or US$[485] billion, to total IMF resources.
Bilateral Borrowing Agreements: bilateral borrowing agreements between the IMF and a number of members allow the Fund to borrow to ensure sufficient lending capacity and serve as a third line of defense after quotas and the NAB. Currently, bilateral borrowing agreements with 42 creditors are in place that contribute SDR 141 billion, or US$[188] billion, to total IMF resources. The 2020 BBAs have an initial term of three years through end-2023, extendable with creditor consents through end-2024.