IMF Rapid Credit Facility (RCF)
April 17, 2017
The Rapid Credit Facility (RCF) provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need. The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, including in times of crisis. The RCF places emphasis on the country’s poverty reduction and growth objectives.
Financial assistance tailored to country needs
Purpose. The RCF provides low-access, rapid, and concessional financial assistance to LICs facing an urgent balance of payments need, without program-based conditionality. It can provide support in a wide variety of circumstances, including shocks, natural disasters, and emergencies resulting from fragility. The RCF also provides policy support and may help catalyze foreign aid.
Eligibility. The RCF is available to PRGT-eligible members that face an urgent balance of payments need, where a full-fledged economic program is either not necessary (for instance because of the transitory and limited nature of the shock) or not feasible (for instance because of capacity constraints or domestic fragilities).
Duration and repeated use. Financial assistance under the RCF is provided as an outright loan disbursement. While these disbursements are often one-off, as in the case of an urgent balance of payments need of limited duration (in particular under the shocks window), they may be used repeatedly. A repeat use of the RCF is possible within any three-year period if the balance of payments need is caused primarily by an exogenous shock or the country has established a track record of adequate macroeconomic policies. However, no more than two disbursements may be made in any twelve-month period. Repeat use of the RCF may facilitate eventual transition to an ECF arrangement.
Access. Access to RCF financing is determined on a case-by-case basis, taking into account the country’s balance of payments need, the strength of its macroeconomic policies, capacity to repay the Fund, the amount of outstanding Fund credit, and the member’s record of past use of Fund credit. Under the RCF, access is normally limited to 18.75 percent of quota per year and 75 percent of quota on a cumulative basis, although augmented access limits apply under the RCF’s shocks window (37.5 percent of quota per year and 75 percent on a cumulative basis).
Fund support under the RCF is provided without ex post program-based conditionality or reviews. Economic policies supported under the RCF should aim at addressing the underlying balance of payments difficulties in support of the country's poverty reduction and growth objectives.
Concessional lending terms
Financing under the RCF carries a zero interest rate, has a grace period of 5½ years, and a final maturity of 10 years.