IMF quotas should reflect countries weight in global economy: US

The United States has said that the IMF quota should reflect the country's weight in global economy, describing the quota system as the fundamental building block of the International Monetary Fund.

"IMF quotas are the fundamental building block of the Fund, and it is important that quotas reflect countries' weight in the global economy," US Treasury Secretary Jacob Lew, in his address to the IMF committee, yesterday said.

The statement gains significance as emerging market economies like India are seeking a larger share in the IMF quota.

The United States has strongly supported efforts to strengthen the international financial architecture over the last four years - particularly in giving the IMF a stronger financial base, and a governance structure that better reflects the global economy, he said.

"We are actively working with Congress to secure legislation implementing the 2010 IMF quota reforms," Lew said.

Noting that the US encourages all IMF members to be transparent with respect to foreign exchange intervention and reserves composition, Lew reiterated that China needs to increase its efforts to achieve a durable shift from export- and investment-led growth to sustainable consumption-led growth, including more decisive actions on structural reform and moving more quickly towards a market-determined exchange rate.

"The declining efficiency of credit and investment suggests that China needs to transition to a new growth model. Further progress in rebalancing growth toward consumption could help mitigate the buildup of risks to the financial sector," he said.

Lew said the US is the anchor of the international financial system.

"With the deepest and most liquid financial markets, when risk rises, the flight to safety and to quality brings investors to US markets. But the United States cannot take this hard earned reputation for granted," he said.

"The President has called on Congress to reopen the government and increase the statutory debt limit. Prior to the government shutdown, all signs pointed to the strengthening recovery of the US economy," Lew said in reference to the current economic and political crisis that has plagued the country resulting in the government shutdown for more than 10 days now.