Where the IMF Gets Its Money

March 31, 2020

Resources for IMF loans to its members on non-concessional terms are provided by member countries, primarily through their payment of quotas. Multilateral and bilateral borrowing serve as a second and third line of defense, respectively, by providing a temporary supplement to quota resources. These borrowed resources played a critical role in enabling the IMF to support its member countries during the global economic crisis. The IMF’s current total resources amounting to about SDR 978 billion translate into a capacity for lending or “firepower” of about SDR 715 billion (around US$ 1 trillion), after setting aside a liquidity buffer and considering that only resources of members with strong external position are used for lending.

Quotas

Quotas are the IMF’s main source of financing. Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.

The IMF regularly conducts general reviews of quotas to assess the adequacy of overall quotas and their distribution among members. The most recent increase in quotas, to SDR 477 billion (US$ 651 billion), was agreed under the 14th Review (concluded in December 2010, effective from January 2016.) The 15th Review was concluded in February 2020 without a quota increase. In its resolution concluding the 15th Review, the Board of Governors also provided guidance on the 16th Review, expected to be concluded no later than December 15, 2023.


 

 

Multilateral Borrowing

New Arrangements to Borrow

  • 40  participants
  • Total size SDR 182 billion (US$249 billion)
  • Activation requires support from 85% of creditors eligible to vote
  • Activated ten times between April 2011 to February 2016
  • Last activation ended in February 2016
  • Current five-year period runs through November 2022
  • Agreed reforms double the NAB for a new period from 2021 to 2025, subject to creditors' consents.

Through the New Arrangements to Borrow (NAB) a number of member countries and institutions stand ready to lend additional resources to the IMF. The NAB constitutes a second line of defense to supplement IMF resources to forestall or cope with an impairment of the international monetary system. In January 2020, the IMF’s Executive Board approved a doubling of the NAB resources from the current SDR 182 billion to SDR 365 billion, for a new NAB period from 2021 to 2025. This doubling is subject to creditors’ consents and is targeted to become effective on January 1, 2021.


Bilateral Borrowing Agreements

2016 Bilateral agreements

  • 40 participants with approved 2016 Borrowing Agreement
  • Total commitments of about SDR 318 billion (US$434 billion)
  • Activation of the agreements requires support from 85% of creditors eligible to vote
  • Current agreements run through end-2020
  • The IMF Executive Board approved in March 2020 a framework for a new round of bilateral borrowing agreements with initial terms through end-2023, extendable with creditor consent through end-2024.

Bilateral Borrowing Agreements serve as a third line of defense after quotas and the NAB.

Since the onset of the global financing crisis, the IMF has entered into several rounds of bilateral borrowing agreements (BBAs) to ensure that it can meet the financing needs of its members. The current BBAs, agreed in 2016, were extended in 2019 for one further year and run through end‑2020.

To succeed these agreements, the Executive Board approved in March 2020 a framework for a new round of bilateral borrowing. The new framework is broadly the same as that agreed in 2016 for the current BBAs. The new BBAs are to take effect from January 1, 2021 and will have an initial term of three years through end-2023, which is extendable with creditors’ consents for one further year through end-2024.


 

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Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds.