International Monetary Fund (IMF) Executive Board Approves a Proposal to Increase in IMF Quotas

The board proposes a 50 % IMF quotas increase allocated to members in proportion to their current quotas.
Now, the proposal will be considered and voted on by the Board of Governors, after which it will be made effective.

The IMF quotas increase would help safeguard global financial stability by enhancing the IMF’s permanent resources and reducing reliance on borrowed resources.

The proposal also includes a call for work to develop, by June 2025, possible approaches as a guide for further quota realignment.

Significance of the rise in IMF Quotas

• Help safeguard global financial stability by enhancing the IMF’s permanent resources
• Reducing reliance on borrowed resources.
  ♦ Currently, the Fund relies on bilateral borrowing arrangements and pledges to a crisis lending fund called the
• New Arrangements to Borrow for nearly 60% of its lending resources.

About IMF Quotas

• Quotas are the building blocks of the IMF’s financial and governance structure.
  ♦ Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account.
• Use of Quotas is to determine
  ♦ Resource contribution of a member
  ♦ Voting power in IMF decisions.
  ♦ Members get one vote per SDR100,000 of quota plus basic votes, which are the same for all members.
  ♦ Amount of loans a member can obtain from the IMF.
  ♦ General allocation of SDRs.
• India currently have Quota of 2.75% with voting rights of 2.63%.

IMF quotas formula

• Economic Variability                              15%
• Gross Domestic Product (GDP)           50%
• International Reserves                           5%
• Openness to the Global Economy        30%

About IMF

• The IMF is a global organization that works to achieve sustainable growth and prosperity for all of its 190 member countries. It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being. The IMF is governed by and accountable to its member countries.
• The IMF is governed by and accountable to 190 countries that make up its near-global membership.
• The IMF was founded by 44 member countries that sought to build a framework for economic cooperation.
• The IMF was established in 1944 in the aftermath of the Great Depression of the 1930s.

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