Agreement reached on IMF credit resources

International Monetary Fund (IMF) Managing Director Kristalina Georgieva and Spain's Minister of Economy and Digitalization Nadia Calvino, who chairs the International Monetary and Financial Committee (IMFC), held a press conference as part of the IMF-World Bank Annual Meetings in Marrakech, Morocco.

At the press conference, Nadia Calvino stated that members had reached a fundamental agreement on increasing financing levels through an increase in IMF quotas.

While Calvino did not provide details on the conditions of the quota increase, she emphasized that the increase would enable the IMF to maintain global financial stability.

WILL MAKE THE IMF FINANCIALLY STRONG TO TAKE ACTION

IMF Managing Director Kristalina Georgieva also stated that the Israel-Palestine conflict is another source of uncertainty for the global economy, noting that it is still too early to measure the conflict's impact on the global economy.

Reporting that they have agreed that changing the voting rights of IMF members should be the "next step" after the quota increase, Georgieva stated that there is a consensus on having a clear plan for this.

Georgieva emphasized that the quota increase would "make the IMF financially strong to take action in the event of another economic shock," such as the COVID-19 pandemic.

3 BILLION DOLLARS IN ADDITIONAL CREDIT FOR POOR COUNTRIES

In a written statement, IMF Managing Director Kristalina Georgieva announced that the target of increasing the Poverty Reduction and Growth Trust (PRGT) by 3 billion dollars has been reached.

Stating that PRGT loans, which low-income countries use under concessional terms, have increased fivefold since the COVID-19 pandemic to 30 billion dollars, Georgieva noted that approximately 30 countries have utilized these loans.

IMF QUOTAS

IMF quotas, which are adjusted according to the size of a country's economy, determine how much funding a country must provide to the IMF, its voting power, and the maximum amount of credit it can receive.

Countries such as China, India, and Brazil, whose economies are growing significantly faster than those of developed Western nations, have long been calling for a readjustment of quotas to reflect their increasing economic weight.

While the US holds the largest share of IMF quotas at approximately 17.43 percent, it has been noted that China's share, which accounts for approximately 18 percent of global economic output, is only 6.40 percent.

With the agreement reached on the quota increase, it is expected that voting rights will also be updated in the future to better reflect the economic weight of IMF members.