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U.S. opposes more IMF funding, at odds with other stakeholders

The United States repeated its opposition to increasing overall funding and shareholding quotas for the International Monetary Fund, putting it at odds with other stakeholders on the need to boost the global lender’s resources and update its governance.

U.S. Treasury Secretary Steven Mnuchin said the Trump administration opposes any changes now, likely meaning the effort to lift IMF funding and reshuffle voting rights was a dead issue as global finance leaders gathered in Washington this week for the IMF and World Bank spring meetings.

The voting quotas were last altered nearly a decade ago.

“In our view, the IMF currently has ample resources to achieve its mission, and countries also have considerable complementary resources should a crisis emerge,” Mnuchin said in a statement for the IMF’s steering committee meeting that was posted on the IMF’s website on Friday.

“Thus, we do not see a need for a quota increase at this time and support closure of the 15th General Quota Review as soon as possible.”

Without U.S. backing for an update to the IMF’s stakeholding weights, there was little prospect for a change at this week’s meetings.

“There is no majority in sight for any changes regarding IMF quotas,” a German official said on condition of anonymity.

The IMF’s last quota increase was agreed in 2010, boosting the shareholding and influence of major emerging markets including China and Brazil.

The IMF has current total lending capacity of about $1 trillion (764.99 billion pounds), including the New Arrangements to Borrow crisis fund that was greatly expanded in 2009 at the depths of the last financial crisis.

That fund is set to expire in November 2022.

British finance minister Philip Hammond worried the lack of a funding boost could hamper the IMF’s ability to step in to help Venezuela respond to its worsening humanitarian and economic crisis.

“This set of meetings is crucial to the debate about IMF quotas and funding for the IMF,” Hammond said.

“We all anticipate that as events unfold in Venezuela, at some point there will be a need for a major programme to support Venezuela. So the UK is very keen to ensure that the IMF in particular is properly funded.”

Oil-rich Venezuela is embroiled in political and economic turmoil as socialist President Nicolas Maduro battles to retain power in the face of U.S. and Western powers’ backing of opposition leader Juan Guaido.

IMF and World Bank shareholders, meanwhile, are still undecided on whether to recognise Guaido as the South American nation’s leader.
Source: Reuters (Reporting by David Lawder, David Milliken and Michael Nienaber in Washington; Writing by Dan Burns; Editing by Paul Simao)

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