The International Monetary Fund

The International Monetary Fund

Updated March 7, 2022
The International Monetary Fund
The International Monetary Fund (IMF, the Fund), founded
recommendations is enforced through pressure exercised by
in 1945, is an international organization that works to
other IMF members and the global financial sector, which
ensure the stability of the international monetary system.
have access to most IMF analysis of global economic risks.
The United States is a founding member of the IMF and the
largest financial contributor. Congress helps shape the U.S.
Loans. The IMF makes loans to countries experiencing
participation in the IMF through oversight, appropriations,
balance-of-payments difficulties, which generally means
and other legislation. Key issues for Congress include IMF
they are facing problems paying for necessary imports or
support for Ukraine, possible IMF sanctions on Russia,
servicing their debt payments. The temporary financial
China’s role at the IMF, and COVID-19 response efforts.
assistance enables countries to stabilize their economies,
while implementing economic reforms. The IMF disburses
The IMF: Key Facts
its loans in phases (“tranches”) after verifying that specified
Membership: 190 Countries.
economic conditions and reforms have been met
(“conditionality”).
Headquarters: Washington, DC.
Executive Board: 24 Directors; the United States, China,
Capacity Development. The IMF provides technical
Japan, Germany, France, and the United Kingdom each have their
assistance and training to help member countries strengthen
own representatives; others are formed into constituencies.
their capacity to design and implement effective policies.
Total Resources: $687 bil ion in quota; $708 bil ion of
The IMF provides technical assistance in monetary and
additional pledged or committed resources.
financial policies; fiscal policy and management; statistical
U.S. Financial Commitment: about $117 bil ion in IMF quota
data complication; and economic and financial legislation.
and $44 bil ion in supplemental funds.
Organization and Structure
Largest Borrowers: Argentina, Egypt, Ukraine, Pakistan,
The IMF’s governing document, the Articles of Agreement,
Ecuador.
provides for a three-tiered governance structure with a
board of governors, an executive board, and a managing
The IMF has reinvented itself several times since its
director. The board of governors is the highest
creation. From 1946 to 1971, during the so-called Bretton
policymaking authority of the IMF. All member countries
Woods era, the IMF oversaw a system of fixed exchange
are represented on the board of governors, usually at the
rates pegged to the U.S. dollar, which was itself convertible
finance minister or central bank governor level. Day-to-day
into gold. When non-U.S. currencies suffered payments
authority over operational policy, lending, and other matters
imbalances arising from their normal trading and financial
is vested in the board of executive directors, a 24-member
relationships, the IMF provided short-term financing to
body that meets three or more times a week to oversee and
cover temporary hard currency shortfalls. After the collapse
supervise the activities of the IMF.
of the Bretton Woods system of fixed exchange rates in
As the largest shareholder, the United States has its own
1971, IMF members enacted a comprehensive reform of the
seat on the executive board. The executive board or board
organization and its operations in 1975. The IMF
of governors of the IMF can approve loans, policy
transformed itself from being an organization focused
decisions, and many other matters by a simple majority
exclusively on issues of foreign exchange convertibility and
vote; however, a supermajority vote is required to approve
global monetary stability to one having a broader mandate:
major IMF decisions. The supermajority may require a 70%
lending for a range of financial crises, including debt,
or 85% vote, depending on the issue. At 17.43% of total
currency, and banking crises, and engaging on a wide range
voting power, the United States has veto over major policy
of issues including capital flows, financial regulation, and
decisions. The primary source of IMF lending resources is
surveillance of the global economy.
the financial contributions or quota subscriptions of its
Key Functions
member nations. A country’s proportion of quota, or quota
Since the 1970s, the IMF’s mandate of promoting
share, broadly reflects its weight in the global economy;
larger economies have larger quotas. A member’s quota
international monetary stability includes three main
also impacts the country’s voting power at the IMF.
functions:
Countries with larger quotas, and thus larger financial
commitments to the institution, have a greater say in how
Surveillance. The IMF regularly monitors the economic
the IMF is run. The United States contributes $117 billion
and financial policies of its member countries. Through
to the IMF quota (17.46%). In addition, the United States
surveillance at the global level and in individual countries,
has contributed $44 billion to funds at the IMF that
the IMF highlights possible risks to domestic and external
supplement quota resources.
stability and advises member governments on needed
policy adjustments. The implementation of IMF
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The International Monetary Fund
As of February 11, 2022, the IMF had total lending
rights (SDRs) and prohibit the issuance of new SDRs for
commitments around $239.2 billion. Argentina has the
the Putin and Lukashenko dictatorships.
highest level of outstanding IMF financing ($40.18 billion),
902% of its quota. Other large borrowers include: Egypt
IMF’s Response to the COVID-19
($19.6 billion), Ukraine ($9.8 billion), Pakistan ($7.84
Pandemic
billion) and Ecuador ($6.86 billion).
The IMF has several emergency financing mechanism
China and other Emerging Powers
options for deploying resources in response to the
Coronavirus Disease 2019 (COVID-19) pandemic. The
Over the past several decades, the balance of global
Fund has temporarily doubled access to its emergency
economic power has been shifting from the United States
facilities—the Rapid Credit Facility (RCF) and Rapid
and Europe to China and a number of other fast-developing
Financing Instrument (RFI). These facilities allow the Fund
countries. These economies account for rising shares of
to provide emergency assistance without the need to have a
global GDP, manufacturing, and trade, and these shifts are
full-fledged program in place, which is a time-consuming
driven by growing economic integration and
process. According to the U.S. Treasury, in 2020, the IMF
interdependence among economies, particularly through
approved 36 emergency financing arrangements through the
global production and supply chains that incorporate inputs
RFI, totaling $22.1 billion, and 49 concessional emergency
from many different countries. Related to these shifts are a
financing arrangements to low-income countries through
significant expansion of trade and global value chains
the RCF, totaling $9 billion. The IMF also extended debt
among developing countries (South-South trade).
service relief to 29 of its poorest and most vulnerable
Commensurate with its larger global economic presence,
member countries on their IMF obligations. The IMF is
China is playing a larger role at the IMF – Chinese staff
seeking to increase its debt relief resources by $1.4 billion
now have a larger presence within the IMF, and in 2016,
to provide additional debt service relief.
the IMF included the renminbi, China’s currency, in the
basket of currencies that make up the SDR.
The IMF is also seeking to triple the size of its Poverty
Reduction and Growth Trust Fund (PRGT) to $17 billion.
Some U.S. officials are concerned that in addition to
The Fund currently has $11.7 billion in commitments from
playing a larger role at the IMF, China may be establishing
Japan, France, the UK, Canada, and Australia. Lastly, at the
international economic institutions and pursuing financing
behest of the G-20, the IMF agreed in August 2021 to a
arrangements that may be designed, in the long run, to
$650 billion increase in Special Drawing Rights (SDRs) —
supplant existing U.S.-led institutions. As part of a broader
international reserve assets created by the IMF — and to
international economic strategy, as well as to meet a range
supplement member countries’ official foreign exchange
of domestic industrial policy goals, China is investing in a
reserves. Of this amount, $275 billion went to emerging
range of institutions and initiatives, including the Asian
market and developing countries, including $21 billion to
Infrastructure Investment Bank (AIIB) and other
low-income countries. Advanced economies sought to
international development funding mechanisms, such as the
channel at least $100 billion of the new SDRs allocated to
Silk Road Fund and the New Development Bank (also
them toward low-income countries. However, as of
known as the BRICS Bank) — a collective arrangement
February 2022, countries have pledged only $60 billion of
with Brazil, Russia, India, and South Africa. China has also
the SDRs to channel to low-income countries.
positioned itself as a major bilateral development lender via
for infrastructure projects in developing countries.
Select Policy Issues for Congress
Russia’s Invasion of Ukraine
Congress has a number of options for directly influencing
Following Russia’s invasion of Ukraine
policies including hearings to gather additional information
in February 2022,
about specific issues, directing the U.S. representatives to
the IMF and the World Bank issued a joint statement,
advocate and vote for specific policies, and/or tie U.S.
noting that both institutions are working to support Ukraine
financial contributions to specific institutional reforms.
directly, as well as to “assess the economic and financial
Possible questions for congressional consideration include:
impact of the conflict and refugees on other countries in the
region and the world” and “provide enhanced policy,
 How can the United States work within the IMF to assist
technical, and financial support to neighboring countries as
Ukraine and limit Russia’s engagement with the global
needed.” The IMF currently has a $5 billion loan in place
economy?
for Ukraine, which was extended through 2022. Under this
program, $2.2 billion is available between now and the end
 Has the IMF response to the COVID-19 pandemic been
of June. The World Bank is preparing a $3 billion package
sufficient? Are developing countries turning to China
of support, starting with a fast-disbursing budget support
and other borrowers instead of the IMF to finance their
operation for at least $350 million. At the same time, the
COVID-19 response efforts? If so, why?
Ukrainian Central Bank has asked the IMF and the G-7
major economies to limit the participation of Russian (and
 How should the United States seek to influence the
Belorussian) representatives in their activities.
IMF’s engagement with China as China’s role in the
global economy continues to increase?
On March 3, 2022, Rep. French Hill introduced H.R. 6899,
The Russia and Belarus SDR Exchange Prohibition Act,
which would deprive Russia and Belarus of emergency
Martin A. Weiss, Specialist in International Trade and
liquidity through the exchange of IMF special drawing
Finance
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The International Monetary Fund

IF10676

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https://crsreports.congress.gov | IF10676 · VERSION 9 · UPDATED