The FINANCIAL — The Executive Board of the International Monetary Fund (IMF) has approved a second one-year extension of the 2012 Borrowing Agreements, following a first one-year extension approved last year.
This second one-year extension also requires, for purposes of each agreement, the respective lender’s consent and, as of September 30, consents had been received from 31 lenders whose agreements amount to about US$365 billion (SDR 260 billion at end-September 2015 exchange rates), or 92 percent of the total approved by the Executive Board. The remaining lenders are in the process of finalizing their consents. The agreements continue to play a key role in ensuring that the IMF has adequate resources to meet members’ potential needs in the event that tail risks were to materialize, according to IMF.
In 2012, a number of member countries committed to increase IMF resources through bilateral borrowing agreements. Following Executive Board approval of the modalities for the 2012 Borrowing Agreements, 35 agreements for a total of about US$396 billion (SDR 282 billion at end-September 2015 exchange rates) were approved by the Executive Board, of which 33 agreements are now effective for a total of US$381 billion (SDR 271 billion at end-September 2015 exchange rates). The 2012 Borrowing Agreements are designed as a second line of defense after quota and New Arrangements to Borrow (NAB) resources and have so far not been activated for use in financing operations. Each agreement has an initial two-year term, and a maximum term of four years.