Public Information Notice: IMF Concludes Discussion on the Fund's Support of Low-Income Member Countries: Considerations on Instruments and Financing
April 15, 2004

Public Information Notice: IMF Executive Board Reviews the Role of the Fund in Low-Income Countries Over the Medium Term, September 10, 2003

Fund Assistance for Countries Facing Exogenous Shocks, August 8, 2003

Debt Sustainability in Low-Income Countries-Towards a Forward-Looking Strategy, May 23, 2003

The Fund's Support of Low-Income Member Countries: Considerations on Instruments and Financing

Prepared by the Finance and Policy Development and Review Departments

(In consultation with other departments)

Approved by Eduard Brau and Mark Allen

February 24, 2004

Use the free Adobe Acrobat Reader to view the full text (177 kb pdf file)


Executive Summary

  1. Introduction

  2. General Considerations
    1. Rationale for the Fund's Future Concessional Financing
    2. Nature of the Fund's Support for Low-Income Members

  3. Review of the Fund's Concessional Financing
    1. Funding Structure
    2. Lending Terms

  4. Strengthening the Fund's Support of Low-Income Members
    1. Making More Efficient Use of PRGF Financing for Members with Continuing Balance of Payments Needs
           Access Norms
           PRGF/EFF Blend Arrangements
    2. Support of Members with Limited Balance of Payments Need
           Low-access PRGF Arrangements
           Precautionary PRGF Arrangements
           Enhanced Monitoring Policy
           Post-Program Monitoring
    3. Tailoring Fund Policies for Emergency Post-Conflict Assistance
    4. Addressing Shocks
           Principles for PRGF Augmentation
           Use of Other Facilities by PRGF-eligible Members

  5. Resource Requirements for the Continuation of PRGF Lending
    1. Short-Term Prospects (2004-2005)
    2. Medium-Term Prospects (2006-2010)
    3. Beyond 2010
  1. Possible Sources of Financing
    1. Financing Solely from the PRGF Reserve Account
           Self-Sustained PRGF
           Sun-Setting PRGF
    2. Self-Sustained PRGF Supplemented with Additional Bilateral Loans
    3. Subsidizing GRA Financing
    4. Conclusion

  2. Issues for Discussion

Text Tables

1. Terms of Fund Lending Facilities and Policies
2. Average Access under PRGF Arrangements
3. Number of Successive PRGF Arrangements by Individual Member
4. PRGF-Eligible Countries-Reserve-Import Coverage
5. Post-HIPC Cases—Access under New PRGF Arrangements
6. Summary of Financing Requirements and Options
7. Sensitivity of Self-Sustained PRGF to Interest Rates and Reserve Account Coverage
8. Contributors of Loan Resources to the PRGF Trust since Inception in 1987

Text Figures

1. PRGF-Eligible Countries—GRA Purchases and Concessional Loan Disbursements
2. Loan Commitments under SAF and ESAF/PRGF

Text Boxes

1. Evolution of the Fund's Concessional Assistance
2. The Reserve Account of the PRGF Trust, Special Disbursement Account (SDA), and Self-Sustained PRGF
3. Need as a Condition for the Use of PRGF Resources
4. Criteria for Blended PRGF/GRA Access
5. PRGF/EFF Blends—Potential Coverage of Proposed Guidelines
6. Emergency Post-Conflict Assistance—History and Current Policy
7. Principles for PRGF Augmentation
8. Review of the Compensatory Financing Facility (CFF)
9. Exceptional Financing for Protracted Arrears Cases
10. Reimbursement of Administrative Expenses Associated with Concessional Lending Operations

1. The Enhanced Monitoring Policy (EMP)