Rollback of Credit Arrangements in the New Arrangements to Borrow

This paper presents a proposal for aggregate reduction of the New Arrangements to Borrow (NAB) by 16.8 percent (SDR 61.3 billion), while broadly preserving relative shares of NAB participants, in line with guidance by the BoG Resolution No. 79-1 on the Sixteenth General Review of Quotas (adopted on December 15, 2023). The objective is to maintain the Fund’s lending capacity as a result of the proposed 50 percent quota increases, conditional on a reduction (“rollback”) in the NAB credit arrangements and taking into account also the expiration of the 2020 Bilateral Borrowing Agreements. Changes in NAB credit arrangements require high levels of support from NAB participants. A safeguard mechanism allows the rollback to become effective provided that participants representing at least 90 percent of credit arrangements have consented to this proposal. The effectiveness of the rollback of NAB credit arrangements would be tied to the effectiveness of the quota increases under the Sixteenth General Review of Quotas.