IMF resources

While the implementation of the 14th quota review on 26 January 2016 secures the IMF's resources, doubling its permanent quota resources, it does not significantly increase the Fund's overall resources because the members agreed in 2011 to reduce borrowing resources (New Arrangements to Borrow – NAB, see below) in the same amount.  The IMF's total resources thus went from 880 billion to 940 billion SDR – i.e. USD 1,310 billion – (with a rise in quotas from 238b SDR to 477b SDR, a drop in NAB from 370b SDR to 182b SDR, and bilateral loans stabilised around 270b SDR).

France's commitments to the IMF in March 2016 amounted to 57 billion SDR (€77 billion), most of which comes from our €31.4 billion bilateral loan of 2012.

Resources derived from the quotas

To finance its lending operations, the IMF has resources taken from its members' quotas, which consist of assets in SDR and in “usable” national currencies of the member countries considered to have a sufficiently solid external position for these assets to be used to finance the IMF's lending¹. 

Borrowing mechanisms

If the IMF considers that the resources it gains from the quotas might not be sufficient to meet the needs of its member states, in case of severe financial crisis for example, it may with the agreement of its creditors take advantage of two permanent multilateral borrowing mechanisms whose total capacity in March 2016 was 199 billion SDR (around $277 billion):

• Broader New Arrangements to Borrow (NAB): the NAB are a series of credit agreements between the IMF and 38 member countries. Once activated² with the agreement of participants representing 85% of the total credit agreements of participants with voting rights (i.e. participants with no balance of payments difficulties), and then the approval of the IMF Executive Board, the NAB can procure for the IMF additional resources in the amount of 182 billion SDR (around $254 billion).

• General Arrangements to Borrow (GAB): the GAB enable the IMF to borrow specific amounts of currencies from 11 industrialised countries under certain circumstances, in the amount of 17 billion SDR (around $24 billion). The GAB have been activated ten times, most recently in 1998.

Bilateral loans

In 2012, against the background of a deteriorating economic and financial situation in the euro area, countries committed to increasing the IMF's resources in the form of bilateral loan agreements with a maturity of two years, renewable twice for one year. Thirty-three agreements are in effect in March 2016 for a total of 280 billion SDR (USD 390 billion). They constitute a third line of defence for financial resources, after the quotas and the NAB, and will only be activated if the Forward Commitment Capacity drops below a threshold of 100 billion SDR and the NAB are activated, or there are no more uncommitted resources available through the NAB. The IMF Executive Board of 13 July 2015 approved the second one-year extension. This extension was granted by France for the bilateral loan signed in 2012 in the amount of €31.4 billion.

Outlook

In its report on the sufficiency of the Fund's resources (SM/16/65, 11 March 2016), the IMF pointed out that medium-term forecasts are characterised by exceptionally high levels of uncertainty, market volatility and vulnerabilities, in both the advanced and emerging economies. As a result, the potential use of the Fund's resources may be marked by increased demand for financing from countries with larger GDPs and advanced economies, broader programmes over longer periods, and a larger share of precautionary credit lines.

Resources financing loans to low-income countries (concessional loans)

The IMF grants zero-interest loans³ to low-income countries as part of the Poverty Reduction and Growth Trust (PRGT), which is legally and financially separate from the IMFs general resources. It is made up of a General Loan Account that provides most of the loans of funds to low-income countries, and a General Subsidy Account that finances the difference between the market rates paid to funders and the concessional rates requested of borrowers; loan and subsidy accounts by facility were created for donors who prefer to allocate their contributions to specific facilities rather than making them available to all PRGT facilities. The funds needed to finance the PRGT's loans come from bilateral borrowing arrangement at market interest rates. Additional resources, in particular donations and a portion of the profit from gold sales, are also dedicated to subsidising PRGT loan interest rates. In 2012 the Fund adopted a strategy to create an average annual long-term lending capacity of 1.25 billion SDR.