Revision of IMF quota formula may become key topic of G20 meeting in Shanghai - source

SHANGHAI, February 25 /TASS/. Revision of the IMF quota formula may become key topic of G20 in Shanghai on February 26-27, a source in the Russian delegation told TASS on Wednesday. "The main discussion is most likely to be around the future of the new formula. That was also discussed in 2011-2012. It is necessary to reconsider the formula for calculating quotas as such because, as you know, the current formula does not suit many countries-shareholders of the IMF. The second issue is the next replenishment of the fund's capital," - the source said. The source added that in 2011-2012 the discussion on quotas was postponed because the 14th General Review of quotas that was adopted in 2010 was to come into effect on January 26, 2016. The 14th General Review of quotas included not only the redistribution of votes and shares among the IMF's shareholder countries, but also a significant increase in the authorized capital of the organization - to 477 billion SDR from SDR 238.5 billion previously. SDR is an international means of payment, issued by the IMF. Now when the review came into effect, China’s national quota has reached 6.4%, Russia and India have 2.7% each, Brazil has 2.3%, in South Africa has 0.6%. This gives a total of 14.7% versus 11.5% BRICS countries had previously. This makes it possible to discuss the increasing role of emerging economies in the decision making process of the IMF. According to the source, the replenishment of the IMF authorized capital will be second main topic on the agenda of the G20 meeting. This year, the countries shareholders were to deal with the 15th replenishment of the fund's capital, but due to delays with the revision of quotas, a new replenishment of the fund’s capital will be obviously postponed. According to the source, specific proposals will be ready only by 2017. "The Fund should analyze the situation in the world economy, to analyze the demand for their resources, to assess the current base they have to meet the needs, and on the basis of this analysis they should present their opinion to the shareholders on whether the fund has sufficient resources or, on the contrary, the resource base needs to be replenished,"- the source said. The source said that SDR will likely become another topic on the agenda. On November 30, 2015, the IMF decided to include the yuan to the SDR basket from October 1, 2016. Yuan will have 10.9% in the basket ranking third after the US dollar (41.73%) and the euro (30.93%). Earlier in January, Russia’s Deputy Finance Minister Sergei Storchak said that during its Presidency in the IMF China will raise the question of resetting SDR ideology. Read more