IMF Executive Board Approves Quota Increase Under the 16th Review of Quotas.

On December 15, 2023, the International Monetary Fund Executive Board (IMF) completed the 16th General Review of Quotas. It approved a 50 percent increase in IMF members' quotas (SDR 238.6 billion or USD 320 billion), bringing total quotas to SDR 715.7 billion (USD 960 billion).

The Executive Board Decision, based on the IMF Executive Board's November 7 recommendation, also guides the size of the IMF's lending capacity and the mix of resources. In particular, the decision envisages maintaining the IMF's current lending capacity through the approved increase in quota resources and reduced reliance on borrowed resources. Once the quota increase takes effect, borrowed resources, including New Borrowing Arrangements (NABs), will be reduced, and Bilateral Borrowing Arrangements will be phased out. Proposals to reduce the size of the NAB and transitional arrangements to maintain access to Fund borrowing will be discussed by the Governing Council in early 2024, following consultations with creditors.

In a statement, IMF Managing Director Kristalina Georgieva thanked the Executive Board for completing the 16th General Quota Review, which resulted in a 50 percent increase in the Fund's permanent resources. "The overwhelming support of our members for this decision is a strong vote of confidence in the work of the Fund. It will reduce the Fund's reliance on borrowed resources, restore the primary role of quotas in our lending capacity, and strengthen the IMF's role at the center of the Global Financial Safety Net. It will also strengthen the IMF's capacity to help safeguard global financial stability and respond to members' potential needs in an uncertain world."

Following the Executive Board's approval, the next step is for member countries to approve their quota increases. Members have committed to completing this step expeditiously by the November 15, 2024, deadline. In many cases, this includes legislative approval.

In addition, the Executive Board recognized and informed the Governing Body of the urgency and importance of realigning quota shares to reflect the relative position of Members better in the world economy while maintaining the quota shares of the poorest Members. In this regard, the Executive Board requested that work be undertaken to develop possible approaches as a guide for further quota realignment, including a new quota formula, by June 2025 as part of the 17th Quota Review.

What is a Quota?

Quotas are the building blocks of the IMF's financial and governance structure. Each member is allocated a quota when it joins the Fund and must pay its quota subscription in full. Quotas are expressed in Special Drawing Rights (SDRs), the IMF's unit of account, and are reviewed periodically. A member country's quota generally reflects its relative position in the world economy. Quotas play a crucial role in members' voting power in IMF decision-making bodies, members' access to Fund financing, and a member's share of an overall SDR allocation.