According to Marrakech, October 14 (Reuters), members of the International Monetary Fund (IMF) were unable to reach agreement on a plan today, but promised to "significantly increase" loan resources by the end of the year. This plan, supported by the United States, aims to increase the funding of the International Monetary Fund without increasing the share of large emerging markets.
With the closure of the annual meetings of the International Monetary Fund and the World Bank in Morocco, a statement by the Chairman of the International Monetary Fund's Steering Committee called for the development of a new share allocation plan as bilateral lending arrangements worth $185 billion expire, "at least maintaining the current resource portfolio of the International Monetary Fund".
The shares allocated based on the equity ratio of member countries only account for about 40% of the International Monetary Fund's loan capacity of approximately one trillion US dollars. The International Monetary Fund says that as economic volatility intensifies, a larger share will provide more loan certainty.
The US Treasury plan to allow countries to contribute new share funds based on their current equity ratio, which has remained unchanged since 2010, has won support from the Group of Seven countries, India, and other emerging markets.
The member countries of the International Monetary and Financial Committee have agreed to add a third Chairman of the Executive Board of the International Monetary Fund to represent African countries.
The statement by the Chairman of the International Monetary and Financial Committee opened the door to the possible adoption of the US plan, pointing out the possibility of a "transitional arrangement". It also requires the Executive Board of the International Monetary Fund to propose options for adjusting the equity ratio plan by June 2025.
This will accelerate the process of the next five-year share review and meet the deadline proposed by International Monetary Fund President Christina Georgieva to adjust the shareholding ratio to maintain the organization's credibility.
It was also reported on the website of Nihon Keizai Shimbun on October 15 that the International Monetary Fund (IMF) supported capital increase on October 14. Japan believes that increasing capital while maintaining the current investment ratio is the "only realistic choice".
The International Monetary Fund is expected to decide on a capital restructuring before December 15th to expand loans to developing countries. Some countries require an increase in investment ratio based on their economic scale, while the United States and Japan, which rank first or second in investment ratio, demand to maintain this ratio. According to the Japanese Ministry of Finance, Japan has proposed a plan to increase investment by an average of 1.5 times in each country. Japan believes that it is unrealistic for all member states to reach an agreement on changing their investment ratios within the deadline.
Strengthening multilateral development financial institutions was the main topic of discussion at the annual meetings of the International Monetary Fund and the World Bank held in Marrakech.
Christina Georgieva, President of the International Monetary Fund (Reuters)