Switzerland provides the IMF with funds for lending. By lending, the IMF can give a member country financial support for implementing a macroeconomic adjustment programme. Switzerland provides the IMF with funds for two types of lending:
1. Regular lending with market-rate interest
Most of the IMF lending for member states is subject to market-rate interest. For this form of lending, Switzerland can provide a maximum of around CHF 24 billion in total, distributed among the following three sources of funding:
- Quotas: Quotas are the IMF's primary source of funding. They are binding on all members and are of unlimited duration. The quotas also determine the voting power of the countries in the IMF's Executive Board, as well as the scope of the financial aid individual member countries are entitled to claim.
Switzerland's quota share currently amounts to about 1.2% (approximately CHF 8 billion) when converted.
- New Arrangements to Borrow (NAB): member countries can thereby voluntarily make additional funds available to the IMF. These resources are made available by means of fixed-term credit lines, supplement the quotas and may be used only in the event of disruptions to the international monetary and financial system.
Switzerland participates in the NAB. The maximum amount is the equivalent of just over CHF 7.5 billion.
- Bilateral credit lines: the member countries can voluntarily make additional resources available to the IMF in the form of fixed-term bilateral credit lines. In October 2016, the decision was taken to renew the bilateral credit lines which were granted to the IMF in 2012 (total of around USD 440 billion). These credit lines should ensure that the IMF would have adequate means to stabilise the international monetary and financial system in the event of serious systemic crises. The credit lines have never been needed before and will expire by 2020 at the latest.
- After completion of the revision of the Federal Act on International Monetary Assistance (MAA), in October 2017, the Federal Council instructed the Swiss National Bank (SNB) to grant the IMF a loan of CHF 8.5 billion. The Confederation gives the SNB a guarantee for timely reimbursement. This bilateral loan entered into force on 30 January 2018.
2. Subsidised lending for low-income countries
Credit on preferential terms is extended to low-income member countries from the Poverty Reduction and Growth Trust (PRGT) of the IMF. The PRGT is financed by bilateral contributions from member countries as well as IMF resources.
On 14 June 2017, Parliament took the decision to assume a guarantee liability of CHF 800 million to the SNB within the scope of a loan to the PRGT.
With the exception of contributions for PRGT interest subsidies, Switzerland's financial contributions to the IMF are provided by the (SNB). The Confederation gives the SNB a guarantee for timely reimbursement and interest payments in the case of bilateral credit and loans to the PRGT.
If need be, the funds utilised by the IMF for regular lending with market-rate interest can be reclaimed forthwith by the SNB at any time.
Information on the current status of the financial relations between Switzerland and the IMF: see link.
Bilateral monetary assistance
Under the Federal Act on International Monetary Assistance, Switzerland can also provide monetary assistance to individual countries and groups of countries to maintain and promote the stability of international monetary and financial relations.
In March 2017, Switzerland transferred the first credit tranche of USD 100 million to Ukraine. It is part of a bilateral credit of USD 200 million which Switzerland approved in February 2015 for Ukraine within the scope of action coordinated internationally by the IMF which includes an IMF programme and bilateral credits.
Last modification 07.09.2018