Where the IMF Gets Its Money

April 26, 2021

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 973 billion translate into a capacity for lending of about SDR 707 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.

1/ Agreed quotas, current NAB credit arrangements (excluding prospective participants), and 2020 BBAs

2/ Includes: quotas of members participating in the Financial Transactions Plan (FTP); credit arrangements of NAB participants eligible to participate in the Resource Mobilization Plan (RMP) in the event of NAB activation; and credit amounts under effective 2020 BBAs with members participating in the FTP. Excludes 20 percent liquidity buffers.

Multilateral Borrowing

New Arrangements to Borrow

  • 40  participants (38 current and 2 prospective participants)
  • Size of the NAB was doubled effective January 2021, and now stands at SDR 361 billion (US$521 billion)
  • Current five-year period of NAB effectiveness runs from January 2021 through December 2025
  • NAB Activation requires support from 85% of participants eligible to vote
  • Activated 10 times between April 2011 to February 2016
  • Last activation ended in February 2016

The New Arrangements to Borrow (NAB) constitutes a second line of defense to supplement IMF resources to forestall or cope with an impairment of the international monetary system. Through the NAB, a number of member countries and institutions stand ready to lend additional resources to the IMF.  In January 2021, a reform of the NAB took effect following consents from NAB participants, almost doubling the size of the NAB to SDR 361 billion (US$521 billion) for the period from 2021 to 2025.

Bilateral Borrowing Agreements

2020 Borrowing Agreements

  • The 2020 bilateral borrowing agreements are on track to include 42 creditors. Agreements with 40 creditors are effective; agreeements with other prospective creditors are expected to become effective shortly. 
  • Total commitments from 40 effective agreements: SDR 135 billion (US$193 billion)
  • Initial term of three years through end-2023, extendable with creditor consents through end-2024
  • Activation of the agreements requires support from 85% of creditors eligible to vote

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. BBAs serve as a third line of defense after quotas and the NAB.

In January 2021, a new round of 2020 BBAs, (“2020 BBAs”) became effective, replacing the previous round of BBAs which expired at end-2020. So far, agreements with 40 creditors are effective, for a total amount of SDR 135 billion. Agreements with a few other prospective 2020 BBA creditors are on track to become effective shortly. The 2020 BBAs have an initial term of three years through end-2023, which is extendable with creditors’ consents for one further year through end-2024.