Forty members of the Fund, including 5 new creditors, have committed a total of some SDR 319 billion ($450 billion at the exchange rate of October 12, 2017) to bilateral debt funds with initial maturity until the end of 2019, renewable until the end of 2020 with the agreement of creditors for an additional year. Under these commitments, 33 loan agreements totalling SDR 289 billion are effective. Further details will be released in due course. The extension of the conditions preserves the IMF`s total borrowing of approximately $1 trillion for an additional year and is a wise step to give members and markets the confidence that the Fund still has sufficient resources to meet the potential needs of membership. This measure is part of a broader package of measures on IMF resources and governance reform, including support for the maintenance of the IMF`s current resource framework and a review of a doubling of new credit agreements (NAB) and a new bilateral borrowing cycle beyond 2020- approved by IMF membership at IMF meetings in 2019. The terms of the 2016 credit contracts between the IMF and 40 members are now in effect until the end of 2020, after the IMF`s board of directors agrees and the 40 creditors agree to extend the terms of their respective agreements by one year. Bilateral credit contracts are the IMF`s third line of defence after its main loans on quotas – about $650 billion – and its multilateral crisis lending fund, the New Arrangements to Borrow (NAB). With the 2016 credit contracts, we are striving to maintain access to bilateral bond funds from the 2012 agreements, while gaining new participants, in order to build confidence that the Fund has the resources available to meet the needs of members. G20 leaders support this goal of maintaining the IMF`s current lending capacity, and the new line of credit approved by the Executive Board in August 2016 was decisive in achieving this goal. We are very pleased with the outcome of the new bilateral borrowing cycle. Commitments amounted to approximately SDR 319 billion, or $450 billion (at the exchange rate of October 12, 2017), and exceeded the amount obtained under the 2012 credit contracts, mainly due to the participation of new creditors. These commitments will receive the Fund`s lending capacity of approximately $1 trillion, which is essential for the Fund to continue to carry out its mission effectively.
NAB currently has about $250 billion, but IMF member countries agreed last year to double that amount to $500 billion. Bilateral credit contracts would represent the remainder of the IMF`s $100 trillion of borrowing capacity. The resources allocated to IMF loans to their members on non-concessional terms are provided by Member States, mainly through the payment of quotas. Multilateral and bilateral obligations serve as second and third lines of defence respectively by providing a temporary complement to quotas. These borrowed funds played a crucial role in enabling the IMF to support its member countries during the global economic crisis. The IMF`s current budget of approximately SDR 978 billion translates into a lending or “firepower” capacity of about SDR 715 billion (approximately $1 trillion) after setting aside a liquidity cushion and taking into account that only the resources of members with a strong external position are used for lending. The IMF said the new bilateral framework and the expansion of the NAB would come into force in January.