External Relations Department
Washington, D.C. 20431
IMF Standing Borrowing Arrangements
While quota subscriptions of member countries are the IMF’s main source of financing,the Fund can supplement its resources through borrowing if it believes that resourcesmight fall short of members’ needs. Through the General Arrangements to Borrow (GAB)and the New Arrangements to Borrow (NAB), a number of member countries and institutions stand ready to lend additional funds to the IMF.
The GAB and NAB are credit arrangements between the IMF and a group of member countries and institutions to provide supplementary resources of up to SDR 34 billion (about$52 billion) to the IMF to forestall or cope with an impairment of the international monetarysystem or to deal with an exceptional situation that poses a threat to the stability of that system.
Agreement to triple the IMF’s lending resources by expanding the NAB
On April 2, 2009, the Group of Twenty industrialized and emerging market economies (G-20)agreed to increase the resources available to the IMF by up to $500 billion (which would triplethe total pre-crisis lending resources of about $250 billion) to support growth in emergingmarket and developing countries. This broad goal was endorsed by the International Monetaryand Financial Committee in itsApril 25, 2009 communiqué. This resource increase is to bemade in two steps:
first, through immediate bilateral financing from IMF member countries;
second, by subsequently incorporating this financing into an expanded and moreflexible NAB. On September 25, 2009 theG-20 announcedit had delivered on itspromise to contribute over $500 billion to a renewed and expanded NAB.Currently, the Fund has twelve bilateral loan agreements worth about $184 billion and threebilateral note purchase agreements for about $69 billion. More agreements are expected to beadded soon. In addition, on November 24, 2009 the current 26 NAB participants andrepresentatives of 13 potential new participants agreed to make the NAB more flexible andexpand it to up to $600 billion. The next steps in this process would be for the Executive Board of the IMF to take a formal decision and NAB participants, current and new, to take the necessarydomestic procedures, including legislative approval, to participate in the expanded NAB.
Why the GAB was established and how it works
The GAB enables the IMF to borrow specified amounts of currencies from 11 industrialcountries (or their central banks), under certain circumstances, at market-related rates of interest. The potential amount of credit available to the IMF under the GAB totalsSDR
17 billion(about $26 billion), with an additional SDR 1.5 billion available under an associatedarrangement with Saudi Arabia.The GAB, established in 1962, has been renewed ten times, most recently inNovember 2007for a five year period from December 2008. In response to the growing pressures onthe IMF’s resources caused by the emergence of the debt crisis in Latin America in 1982, abroad review was undertaken in 1983. It resulted in a substantial increase in the credit lines,from about SDR 6 billion to SDR 17 billion. Other major amendments to earlier GABprovisions permit the IMF to use it to finance lending to nonparticipants in the GAB, if theIMF faces a situation where it has inadequate resources of its own. The earlier GAB carried