International Monetary Fund: UK Subscription

Tuesday 23rd February 2016 Written Statements

[The Financial Secretary to the Treasury (Mr David Gauke)]

On 23 February, the UK will increase its quota subscription to the IMF by 9,416.6 million special drawing rights (SDRs), equivalent to £9,270.2 million using exchange rates on 22 February 2016. This raises the UK’s total quota subscription from 10,738.5 million SDRs to 20,155.1 million SDRs.

On 20 January 2016, a sufficiency of IMF members notified the IMF of the completion of relevant legislative procedures to implement resolution 66-2 of the Board of Governors of the IMF (DEP2011-0977), thereby bringing increases to IMF members’ quota subscriptions envisaged by that resolution into effect. Parliamentary approval in the UK for implementation of resolution 66-2 was secured via the International Monetary Fund (Increase in Subscription) Order 2011, which came into force on 19 July 2011.

On the same day as the UK increases its quota subscription, two temporary loan facilities with the IMF will change. These facilities act as a second line of defence behind quotas. The UK’s commitment to the new arrangements to borrow will roll back by 9,178.2 million SDRs—equivalent to £9,035.5 million—and a bilateral loan commitment of the same value will become effective.

Worldwide quota increases form part of a wider reform package which makes the IMF stronger and more legitimate. It is vital at this time that we have an IMF equipped to strengthen the resilience of the global economy against risks and spillovers.

An SDR is the unit of account used by the IMF. Its value is calculated daily as a weighted average of the US dollar, euro, yen and pound sterling.

[HCWS542]