Press Release No. 03/02

The Executive Board of the International Monetary Fund (IMF) agreed to submit a Resolution to the IMF's Board of Governors, recommending the conclusion of the Twelfth General Review of Quotas without proposing an increase of quotas. The Executive Board noted that the IMF's current liquidity position remains adequate by historical standards. The Governors are being asked to vote on the proposed Resolution by January 28, 2003, and the votes of a majority of Governors exercising two-thirds of the total voting power will be required to adopt the Resolution.

During the period of the Thirteenth General Review, which commences upon completion of the Twelfth Review, the Executive Board will monitor closely and assess the adequacy of IMF resources, consider measures to achieve a distribution of quotas that reflects developments in the world economy, and consider measures to strengthen the governance of the IMF. The Executive Board intends to provide a status report on its discussions regarding these issues to the International Monetary and Financial Committee (IMFC) by the 2003 Annual Meetings and establish, as the discussions may warrant, a Committee of the Whole to make specific recommendations.

Adoption of the Resolution would mean that the total of IMF quotas remains at the current level of SDR 212.7 billion (about US$287 billion). A member's quota is broadly determined by its economic position relative to other members. A variety of economic factors are considered in determining quotas, including GDP, the amount of current account transactions, and size of official reserves. When a country joins the IMF, it is assigned an initial quota in the same range as the quotas of existing members considered by the IMF to be broadly comparable in economic size and characteristics. Quotas determine the maximum amount of resources a member is called upon to provide to the IMF, serve as the basis for voting power on IMF decisions, determine the distribution of SDR allocations, and serve as the basis for access to IMF resources.

The IMF's Articles of Agreement provide for the Board of Governors to carry out a review of quotas at intervals of not more than five years and, if it deems it appropriate, propose an adjustment of the quotas of members. Each IMF member appoints one Governor, generally the finance minister or head of the Central Bank. The last quota review was concluded on January 30, 1998, with the approval of a 45-percent quota increase (See Press Release No. 98/2).

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