China welcomes US Congress' ratification of IMF quota reforms

Beijing: China on Saturday welcomed the US Congress' ratification of the 2010 quota and governance reforms of the IMF that will give more voting rights and "enhance" the representativeness of emerging economies including India at the international institution.

"Such approval means that the 2010 reforms, after protracted delay, are expected to take effect soon," said the People's Bank of China (PBOC), the central bank.

"The 2010 reforms will enhance the representativeness and voice of emerging market and developing countries (EMDCs) at the IMF, thus helps maintain the IMF's credibility, legitimacy and effectiveness," it said.

Going forward, China will work closely with other member countries to support the IMF to continuously improve its quota and governance structure, to ensure that the international financial remains a quota-based and adequately resourced institution, state-run Xinhua quoted PBOC statement as saying.

"The 2010 reforms will double the IMF's quota resources from SDR 238.5 billion (about USD 329.83 billion) to SDR 477 billion about (USD 659.67 billion), while shifting 6 percent of quota shares to dynamic EMDCs. China's quota will increase from 3.996 percent to 6.394 percent, making China the third largest shareholder in the IMF from the sixth," a PBOC statement said.

Created by the IMF in 1969, the Special Drawing Rights (SDR) is an international reserve asset supplementing members' official reserves. It can be exchanged among governments for freely usable currencies in times of need.

"Four emerging market countries (Brazil, China, India, and Russia) will be among the ten largest members of the IMF," the IMF said yesterday.

The US Congress yesterday passed a legislation approving long-pending quota reform of IMF that will give more voting rights to emerging economies like India and China in the functioning of the organisation.

The IMF Quota and Governance Reform would marginally reduce the voting share of traditional economic powerhouses like the US.