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Borrowing Arrangements

The IMF can borrow currencies from 11 industrialized countries under a special arrangement (photo: Newscom)

While quota subscriptions of member countries are its main source of financing, the IMF can supplement its own resources by borrowing if it believes that additional resources may be required to meet members' needs. (photo: Newscom)

If the IMF believes that its resources might fall short of members' needs—for example, in the event of a major financial crisis—it can supplement its own resources by borrowing. It has  had a range of bilateral borrowing arrangements in the 1970s and 1980s. Currently it has two standing multilateral borrowing arrangements and one bilateral borrowing agreement.

Through the New Arrangements to Borrow (NAB) and the"> General Arrangements to Borrow (GAB), a number of member countries and institutions stand ready to lend additional funds to the IMF. These credit arrangements between the IMF and a group of members and institutions can provide supplementary resources of up to roughly $26 billion (SDR 17 billion) under the General Arrangements and roughly $565 billion (SDR 370.0 billion) under the New Arrangements to the IMF to forestall or cope with an impairment of the international monetary system or to deal with an exceptional situation that poses a threat to the stability of that system.

In April 2009, the Group of Twenty industrialized and emerging market economies agreed to triple the Fund’s lending capacity to $750 billion, enabling it to inject extra liquidity into the world economy during this time of crisis. The additional support will come from several sources, including contributions from member countries that have pledged to help boost the Fund’s lending capacity.