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The Executive Board of the International Monetary Fund (IMF) has approved activation of the New Arrangements to Borrow (NAB) for a further six-month period from April 1, 2012 to September 30, 2012. The NAB is subject to activation for periods of up to six months and was last activated effective October 1, 2011 for a six-month period through end-March 2012. (see Press Release No. 11/342).
The NAB is a standing set of credit lines under which 38 IMF member countries, or their institutions, have committed to provide supplementary resources to the IMF totaling up to SDR 366.5 billion (about US$566.92 billion1). Activation requires the consent of participants representing 85 percent of total credit arrangements eligible to vote, and the approval of the IMF’s Executive Board. Since the expanded NAB was first activated effective April 1, 2011, some SDR 52 billion (about US$81.04 billion) has been committed to Fund-supported programs for which NAB resources could be drawn, and actual drawings under the NAB have amounted to SDR 9.7 billion (about US$15.01 billion).
The NAB supplements the IMF’s quota resources, which are the Fund’s primary source of lending resources and are made up of the quota subscriptions each member pays upon joining the Fund and through quota increases thereafter. The IMF is a quota-based institution and each member’s quota is broadly based on its relative size in the world economy. In the context of the agreement in December 2010 to double the Fund’s quota resources under the 14th General Review of Quotas, it was also agreed that there should be a corresponding rollback of the NAB, resulting in a shift in the composition of the Fund’s lending resources from NAB to quotas while not reducing the overall lending capacity. The necessary technical decisions to implement the agreement on the rollback were taken in December 2011. The membership has committed to make best efforts to complete the steps required for the doubling of quota no later than the Annual Meetings in late 2012. Consents and acceptances to the related reforms are listed online here.
The expanded NAB, which became effective in March 2011 (see Press Release No. 11/74), was renewed by the Executive Board in November 2011 for a further period of five years from November 17, 2012. This renewal reflects the membership’s commitment to ensure the IMF has adequate lending capacity. As part of the renewal, the maximum maturity of NAB claims will be extended from five to 10 years to conform with the IMF lending facilities that it is used to fund.
Useful links:
Factsheet: IMF Standing Arrangements to Borrow
April 1, 2011 Press Release on Activation of the expanded NAB
April 25, 2009 IMFC Communiqué
Factsheets: IMF Quotas; Where the Fund gets its Money
