Press Release: IMF Executive Board Completes First Review Under ECF Arrangement for the Kingdom of Lesotho and Approves Disbursement of US$9 Million
April 4, 2011Press Release No. 11/115
April 4, 2011
The Executive Board of the International Monetary Fund (IMF) has completed the first review of the Kingdom of Lesotho's economic performance under the Extended Credit Facility (ECF) arrangement1. The Board's decision, which was taken on a lapse of time basis, enables the authorities to draw an additional SDR 5.68 million (US$9 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 13.5 million (US$21.4 million).2
The ECF-supported program, adopted against the backdrop of a sharp fall in revenues from the Southern African Customs Union, is on track. Lesotho met all of its quantitative performance criteria except for the performance criterion on stock of net international reserves of the Central Bank of Lesotho that was not observed by a small margin. Structural reforms are also progressing. Ongoing successful program implementation will help strengthen Lesotho’s resilience to external shocks and foster economic growth and poverty reduction.
The three-year SDR 41.9 million (about US$61.4 million) ECF arrangement for Lesotho was approved by the IMF’s Executive Board on June 2, 2010 (see Press Release No. 10/224). Lesotho joined the Fund in July 1968.
1 The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years (http://www.imf.org/external/np/exr/facts/ecf.htm). The Fund reviews the level of interest rates for all concessional facilities every two years.
2 The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.