IMF increases its core resources
Date
05/02/2016
In December 2010, the International Monetary Fund (IMF) member countries adopted a number of reforms that affect the Fund’s governance and lending capacity. The Swedish Riksdag approved these reforms in 2011 but in order for the decision to enter into force, acceptance was required by member countries having 85 per cent of the Fund’s total voting power. This condition was not fulfilled until December 2015, when the United States Congress approved the reforms. The decision formally entered into force at the end of January 2016.
One of the reforms involves a doubling of member countries' so-called "quotas" that determine the countries' voting power and funding commitments. The quota resources can be regarded as a form of capital contribution to the IMF. In practice, it is like the pledge of a loan or a guaranteed credit line. The IMF can thus ask the Riksbank to provide funds from the currency reserve, up to the amount pledged, when it needs them for its onward loans to other countries. The decision means that Sweden's capital contribution to the IMF will rise by SDR 2035 million to SDR 4430 million (the equivalent of about SEK 52 billion at the current exchange rate).
The reform also means that a number of emerging market economies will receive relatively larger quotas and hence have more voting power as a result of their greater significance in the global economy. After the quota increase, Sweden's voting power in the IMF has decreased from 1 per cent to 0.93 per cent.
