Emerging markets may seek changes to IMF's emergency borrowing -Russia

by Reuters
Friday, 11 April 2014 08:15 GMT

By Lidia Kelly

WASHINGTON, April 11 (Reuters) - Developing nations may demand changes to the International Monetary Fund's emergency borrowing mechanism if the United States does not approve the 2010 governance overhaul for the global lender, Russia's finance minister said on Friday.

The long-delayed IMF reforms, aimed at giving more weight to emerging economies, will be discussed later in the day by finance ministers gathered in Washington this weekend for the Fund's twice-yearly meeting.

The ministers are set to debate a handful of ad hoc measures to achieve at least some progress, but generally they appear inclined to give the United States more time.

The IMF's main resources are coming from an emergency fund approved after the 2007-2009 financial crisis, the New Arrangements to Borrow (NAB). This has to be renewed every six months.

When the next replenishment of the resources comes, emerging market countries may raise questions, Russia's Finance Minister Anton Siluanov said on the sidelines of the IMF meeting.

"Countries will say: ... let's consider new ways of how to work with the NABs so that the weight of developing countries in decisions on the allocation of (the money) was more explicit, the position of those countries taken into account to a greater extent than it is now, without the quota revision," Siluanov said.

"Questions, of course, can arise (from emerging markets) on what purposes these funds are spent, about more control over these funds from countries that give additional resources to the Fund."

For now, however, Russia and other countries would still like to give the U.S. more time, he said.

"Varying degrees of changes to the Fund's functioning can be considered, but we still would like a straightforward solution through normal quota principles," Siluanov said. (Reporting by Lidia Kelly; Editing by Catherine Evans)

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