Developing economies' quota in IMF key to global financial stability: CEA

"The executive board of the IMF has proposed to the Board of Governors that a 50% quota increase (should be) allocated to members in proportion to their current quotas," he said

The increase of developing economies quota in the International Monetary Fund (IMF) can play a pivotal role in safeguarding global financial stability by enhancing the multilateral lending agency's permanent resources, Chief Economic Advisor V Anantha Nageswaran said on Wednesday.

Participating in an event organised by the finance ministry, Nageswaran said the reforms of international financial institutions have to go beyond the World Bank and multilateral development banks (MDBs).

"The executive board of the IMF has proposed to the Board of Governors that a 50 per cent quota increase (should be) allocated to members in proportion to their current quotas," he said.

 

The 16th General Review of Quotas (GRQ) is likely to provide a greater say to developing economies in the International Monetary Fund.

"This quota increase can play a pivotal role in safeguarding global financial stability by enhancing the IMF's permanent resources and reducing its reliance on borrowed resources," he added.

Nageswaran also pointed out that during the G20 summit in Delhi this year, the leaders remained committed to revisiting the adequacy of quotas and continuing the process of IMF's governance reform.

Also, speaking at the event, Niti Aayog vice chairman Suman Bery said MDB reforms are incomplete without similar reforms of the IMF.

"Reforms of international monetary order need to come back to centre stage," Bery said.

He said India is going to attract more global finance.

"But, we are not in a world where global financial structure is supportive of long-term growth," he said.