§ Mr. Lennox-Boydasked the Chancellor of the Exchequer what are the principal implications for the United Kingdom of the quota increases agreed at the interim committee on 10 and 11 February.
§ Sir Geoffrey HoweThe United Kingdom's quota is increased from SDR 4.4 billion to SDR 6.2 billion. This represents 6.9 per cent. of the total fund quotas and 6.6 per cent. of the voting rights. In sterling terms the increase is equivalent to some £1.28 billion.
447WSome 25 per cent of the quota increase has to be paid in reserve assets from our existing holdings in the exchange equalisation account. This does not affect the level of the reserves as our reserve position with the fund is correspondingly increased.
The remaining 75 per cent. of the subscription is made in sterling in non-interest bearing notes issued by the Bank of England on behalf of the national loans fund. This is placed on deposit by the IMF, at zero interest rate, at the Bank of England, and is retained for possible use. There is no effect on public expenditure. If the IMF draws on its sterling holdings, it is for the purpose of making a loan, on which it charges interest. The IMF in turn remunerates the United Kingdom.