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 resources
might 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 monetary
system 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 triple
the total pre-crisis lending resources of about $250 billion) to support growth in emerging
market and developing countries. This broad goal was endorsed by the International Monetary
and Financial Committee in its April 25, 2009 communiqué. This resource increase is to be
made in two steps:
 first, through immediate bilateral financing from IMF member countries;
 second, by subsequently incorporating this financing into an expanded and more
flexible NAB. On September 25, 2009 the G-20 announced it had delivered on its
promise to contribute over $500 billion to a renewed and expanded NAB.
Currently, the Fund has twelve bilateral loan agreements worth about $184 billion and three
bilateral note purchase agreements for about $69 billion. More agreements are expected to be
added soon. In addition, on November 24, 2009 the current 26 NAB participants and
representatives of 13 potential new participants agreed to make the NAB more flexible and
expand 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 necessary
domestic 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 industrial
countries (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 totals SDR 17 billion
(about $26 billion), with an additional SDR 1.5 billion available under an associated
arrangement with Saudi Arabia.
The GAB, established in 1962, has been renewed ten times, most recently in November
2007 for a five year period from December 2008. In response to the growing pressures on
the IMF’s resources caused by the emergence of the debt crisis in Latin America in 1982, a
broad 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 GAB
provisions permit the IMF to use it to finance lending to nonparticipants in the GAB, if the
IMF faces a situation where it has inadequate resources of its own. The earlier GAB carried

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URL: http://www.imf.org/external/np/exr/facts/gabnab.htm
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a rate of interest below market rates; this rate was raised at the time of the GAB
enlargement and made equal to the SDR interest rate.
NAB established to supplement GAB resources
The NAB is a set of credit GAB Participants and Credit Amounts
arrangements between the IMF and
26 member countries and Original GAB Enlarged GAB
institutions (under the expanded (1962 -1983) (1983 – 2008)
NAB 13 new participants could be Amount Amount
added to this list). It was proposed Participant (SDR million1) (SDR million)
at the 1995 G-7 Halifax Summit Belgium 143 595
following the Mexican financial Canada 165 893
crisis. Growing concern that Deutsche Bundesbank 1,476 2,380
substantially more resources might France 395 1,700
be needed to respond to future Italy 235 1,105
2
financial crises prompted Japan 1,161 2,125
participants in the Summit to call on Netherlands 244 850
the G-10 and other financially Sveriges Riksbank 79 383
strong countries to develop Swiss National Bank 1,020
financing arrangements that would United Kingdom 565 1,700
double the amount available to the United States 1,883 4,250
IMF under the GAB. The IMF’s Total 6,344 17,000
Executive Board adopted a decision Saudi Arabia (associated credit arrangement) 1,500
establishing the NAB, with effect 1
SDR equivalent as at October 30, 1982
2
from November 1998. 250,000 million yen entered into effect on November 23, 1976
Note: Total may not equal sum of components due to rounding.
The NAB has been renewed twice,
most recently in November 2007 for a further period of five years from November 2008.

Importantly, the NAB is the facility of first and

NAB Participants and Credit Amounts
principal recourse vis-à-vis the GAB except in
Amount
limited circumstances (involving Fund credit to a
Participant (SDR million)
Australia 801
member that is a participant of both the GAB and
Austria 408 NAB, or where a proposal for calls under the NAB
Banco Central de Chile 340 is not accepted). The maximum amount of
Belgium 957 resources available to the IMF under the NAB and
Canada 1,381 GAB is SDR 34 billion (about $52 billion).
Denmark 367
Deutsche Bundesbank 3,519 Commitments from individual participants are
Finland 340 based predominantly on relative economic
France 2,549 strength, as measured by IMF quotas. An IMF
Hong Kong Monetary Authority 340 member country or institution that is not currently a
Italy 1,753
Japan 3,519
participant in the NAB may be accepted as a
Korea 340 participant at the time of a renewal of the decision,
Kuwait 341 if the IMF and participants representing 80 percent
Luxembourg 340 of the total credit arrangements agree. Chile’s
Malaysia 340 participation in the NAB was approved in 2002 at
Netherlands 1,302
Norway 379 the time of its first renewal. New participants may
Saudi Arabia 1,761 also be accepted at other times under certain
Singapore 340 circumstances.
Spain 665
Sveriges Riksbank 850 How the GAB and NAB are used
Swiss National Bank 1,540
Thailand 340
United Kingdom 2,549
United States 6,640
1
Total 34,000
1
Total may not equal sum of components due to
rounding
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A proposal for calls on the GAB or the NAB by the IMF’s Managing Director can become
effective only if it is accepted by their participants, and the proposal is then approved by the
IMF’s Executive Board.

The NAB has been activated once—to finance a Stand-by Arrangement for Brazil in December
1998, when the IMF called on funding of SDR 9.1 billion, of which SDR 2.9 billion was used.

The GAB has been activated ten times. The last time was in July 1998 for an amount of SDR
6.3 billion in connection with the financing of an Extended Arrangement for Russia. Of that
amount, SDR 1.4 billion was used. Both activations were terminated in March 1999, when the
Fund repaid the outstanding amounts following payments of quota increases under the
Eleventh General Review of Quotas and the improvement in the Fund’s liquidity position.

THIS INFORMATION IS CURRENT AS OF MARCH 2010