The Riksbank extends its loan commitments to the IMF
News On 21 October, the Riksdag approved the Riksbank’s extension and renewal of two of its loan agreements with the International Monetary Fund (IMF). The new agreements mean that the Riksbank will continue to contribute to maintaining the IMF’s resources at a time of elevated uncertainty in the global economy. The agreements allow the IMF to borrow up to the equivalent of about SEK 153 billion from the Riksbank.
IMF lending is primarily funded through the quota contributions by IMF member countries. There are also two supplementary forms of funding, originating in increased funding needs during previous financial crises, the New Arrangements to Borrow (NAB) and the bilateral loan agreements with some member countries.
To ensure more sustainable long term resources and improve burdensharing among lenders it was in the autumn of 2019 proposed that the NAB, which has broader participation and longer time frame, would be doubled, and the bilateral loans be reduced.
Sweden is one of the around forty member countries contributing to these loans and has now agreed to continue to contribute with funds for a further period. For Sweden the new set-up means that its total commitments will decrease by the equivalent of about SEK 21 billion.
The Riksbank agrees with the IMF’s assessment that the high uncertainty in the global economy justifies the IMF maintaining its current resource level. Without new agreements, the IMF’s ability to lend money would decrease by about one-third. The loan agreements can only be utilised if the quotas fall below a certain threshold.