Change in Ireland's Quota at the International Monetary Fund
March 3, 2011
The ad hoc quota increases under the Quota and Voice Reforms of the International Monetary Fund (IMF), which were part of the 2008 Quota and Voice Reform package (see Press Release No. 08/64), include a 50 percent increase in Ireland's quota. The package includes agreement on a new quota formula, quota increases for 54 countries, an increase in basic votes, and agreement on an additional Alternate Executive Director for the large constituencies. The last two elements required an amendment to the Fund's Articles of Agreement which is a prerequisite for the ad hoc quota increases. Following the coming into effect of the Voice and Participation Amendment today with the approval of 117 member countries, representing 85 percent of the total voting power (see Press Release No. 11/64), countries that are eligible, and that have already consented to their ad hoc quota increase, now have 30 days to pay for their quota increase.
Ireland's quota at the IMF will increase from SDR 838.4 million to SDR 1,257.6 million once the payment for the quota increase is made. With the new higher quota, Ireland's access to Fund resources under the Extended Fund Facility arrangement (see Press Release No. 10/496) is reduced to 1,548 percent of quota, compared with 2,322 percent originally. This reduces the share of Ireland's credit that is subject to surcharges, which are due on amounts in excess of 300 percent of quota. Based on the current SDR interest rate of 0.43 percent, the average lending interest rate at the peak level of access under the arrangement will be 3.04 percent on credit outstanding less than three years (down from 3.17 percent), and 3.85 percent on credit outstanding longer than three years (down from 4.04 percent). This reduction in average interest rate is the result of the implementation of existing Fund policies under the agreed increase in quotas and not of a change in policy.
The proposed quota increase under the 14th General Review of Quotas, which is expected to be effective by the time of the 2012 World Bank-IMF Annual Meetings, includes a further 174.3 percent increase in Ireland's quota to SDR 3,449.9 million. This would tend to further reduce the average lending rate when it comes into effect.