The International Monetary Fund's governing body has approved a 50% increase in quota resources to be contributed by member countries in proportion to their current IMF shareholding, bringing total quotas to $960 billion, the IMF said, Ednews informs via Reuters.

Governors representing nearly 93% of the total voting power of the fund voted for the 50% increase the IMF's executive board recommended last month, exceeding the 85% required. The voting deadline ended on Friday.

The quota increase, which follows years of extensive discussions among members, will become effective by Nov. 15, 2024 once member countries agree to their respective quota changes, which requires legislative approval in many cases.

The decision largely follows a US-backed plan that would enhance IMF lending resources but delay any IMF shareholding increases for China, India, Brazil and other fast-growing emerging market economies.

But the governors asked the IMF to develop possible approaches for a new quota formula by June 2025, in line with the executive board's recommendation.

The 50% increase in quota funding -- equivalent to about $320 billion at current exchange rates -- will not increase the fund's overall lending firepower of about $1 trillion, but would shift the composition to about 70% more permanent resources while reducing reliance on borrowed resources, the IMF said.

IMF Managing Director Kristalina Georgieva called the decision "a strong vote of confidence for the work of the Fund. It will reduce the reliance of the Fund on borrowed resources, restore the primary role of quotas in our lending capacity and reinforce the role of the IMF at the center of the Global Financial Safety Net," she said.

Georgieva said the move would strengthen the IMF’s capacity to help "safeguard global financial stability and respond to members’ potential needs in an uncertain and shock-prone world."

Currently, the IMF relies on bilateral borrowing arrangements and pledges to a crisis lending fund called the New Arrangements to Borrow. The executive board will discuss proposals for reducing the crisis lending fund in early 2024.

Zuzana Murgasova, deputy director of the IMF's finance department, told Reuters that work on the guidance for a further quota realignment would begin very soon, but declined to provide further details since the discussions were confidential.

"What is really important is that the membership has recognized that this is an urgent priority, and the work will start very soon," she said.

Murgasova said the governors' votes were also confidential, and declined to say which country or countries did not approve the quota increase.