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Thursday, January 28, 2016, 14:24

IMF's quota reforms come into effect

By Xinhua
IMF's quota reforms come into effect
The logo of the International Monetary Fund (IMF) at the organization's headquarters in Washington, DC, May 16, 2011. (Photo / AFP)

WASHINGTON -- The International Monetary Fund's 2010 quota and governance reforms have become effective and will give emerging markets more saying at the international lender, the IMF said Wednesday.

"The conditions for implementing the International Monetary Fund's 14th General Quota Review, which delivers historic and far-reaching changes to the governance and permanent capital of the Fund, have now been satisfied," the IMF said in a statement.

The reforms, which were approved by the IMF's Board of Governors in 2010, will double the IMF's quota resources and reallocate the quota and voting shares away from advanced economies, primarily in Europe, to growing emerging market economies.

The reforms are the biggest change in the IMF's governance since it was established and are a recognition of the increasing role that emerging markets play in the global economy.

China will have the third largest IMF quota and voting share after the United States and Japan, and India, Brazil and Russia will be also among the top 10 members of the IMF.

The IMF said the actual quota increases under the 14th review "are expected to come into effect in the coming weeks" after the IMF Board Reform Amendment entered into force on Tuesday, which was part of the broader package of quota and governance reforms.

"The entry into force of these reforms will reinforce the credibility, effectiveness, and legitimacy of the IMF," the IMF said.

"The reforms represent a major step toward better reflecting in the institution' s governance structure the increasing role of dynamic emerging market and developing countries," it added.

Christine Lagarde, managing director of the IMF, on Wednesday commended members for ratifying these truly historic reforms.

"These reforms will ensure that the Fund is able to better meet and represent the needs of its members in a rapidly changing global environment," Lagarde said in a statement.

"Today marks a crucial step forward and it is not the end of change as our efforts to strengthen the IMF's governance will continue," said Lagarde.

Following the implementation of the 14th General Review of Quotas, focus will now turn to the 15th review and securing a necessary broad consensus, including on a new quota formula, the IMF said.

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