IMF Secures Financing to Sustain Concessional Lending to World’s Poorest Countries over Longer Term

Press Release No. 13/398
October 10, 2013

The International Monetary Fund (IMF) secured today resources needed to sustain concessional lending to low-income countries (LICs) at an average annual capacity of about SDR 1.25 billion (about US$1.92 billion) over the longer term, which is broadly in line with current estimated demand for IMF support to the world’s poorest countries.

A critical mass of 151 member countries have committed to provide to the Poverty Reduction and Growth Trust (PRGT) their share in the partial distribution of the general reserve of SDR 1.75 billion (about US$2.7 billion) attributed to windfall profits remaining from the partial sale of IMF gold, amounting to over 90 percent of the distribution that was approved in September 2012 (see Press Release No. 12/368). These commitments follow an earlier agreement to use SDR 700 million from a partial reduction of the general reserve attributed to windfall gold profits as part of a strategy to fund the trust (see Press Release No. 12/56 ). The total amount of resources now transferred or pledged by the membership under both operations to support concessional lending is more than SDR 2.2 billion (about US$3.4 billion).

“Today marks the culmination of an effort underway for many years to put the PRGT on a sustainable footing,” IMF Managing Director Christine Lagarde stated. “I would like to thank our member countries who have stepped forward to make these pledges, and help us reach this historic milepost. We now have secured critical resources to provide adequate levels of financial support to the poorest countries for years to come. That so many countries, at different levels of development and from all of the world’s regions, have supported this process shows the strong and universal commitment of our membership to help the world’s poorest countries,” she emphasized.

Gold sale profits are part of the IMF’s general resources available for the benefit of the entire membership and cannot be placed directly in the PRGT, which is available only to low-income members. Accordingly, using these resources for PRGT financing involved a strategy to distribute a part of the IMF’s general reserve attributed to windfall gold sales profits to all IMF member countries in proportion to their quota shares, on the expectation that members would direct the Fund to transfer these resources (or would provide broadly equivalent amounts) to the PRGT as subsidy contributions. These subsidies allow lending to LICs at concessional interest rates; currently the IMF provides zero-interest financing to LICs.

The IMF sold 403.3 metric tons of gold in 2009–10 as part of a plan to ensure the long-term financing of the IMF’s day-to-day operations through the creation of an endowment using anticipated gold sale profits of some SDR 4.4 billion (US$6.8 billion). High world gold prices during the sales period, over and above the US$850 an ounce envisaged when the sales were originally planned, generated “windfall” profits of some SDR 2.45 billion (about US$3.8 billion).

The following is the current list of PRGT subsidy pledges:


Member Pledges 1/
(As of October 10, 2013)
 

Afghanistan, Islamic Republic of

Ghana

Pakistan

Albania

Greece

Panama

Algeria

Guinea

Papua New Guinea

Angola

Guinea-Bissau

Paraguay

Antigua and Barbuda

Haiti

Peru

Argentina

Honduras

Poland

Armenia

Hungary

Portugal

Australia

Iceland

Qatar

Austria

India

Romania

Azerbaijan

Indonesia

Russian Federation

Bahamas, The

Ireland

Rwanda

Bangladesh

Italy

Samoa

Barbados

Jamaica

San Marino

Belarus

Japan

São Tomé and Príncipe

Belgium

Jordan

Saudi Arabia

Belize

Korea

Senegal

Benin

Kosovo

Serbia

Bhutan

Kuwait

Seychelles

Bosnia and Herzegovina

Kyrgyz Republic

Sierra Leone

Botswana

Lao People's Democratic Republic

Singapore

Brazil

Latvia

Slovak Republic

Brunei Darussalam

Lebanon

Slovenia

Bulgaria

Lesotho

Solomon Islands

Burkina Faso

Libya

South Africa

Burundi

Lithuania

Spain

Cambodia

Luxembourg

Sri Lanka

Cameroon

Macedonia, FYR

St. Lucia

Canada

Malawi

Sweden

Chad

Malaysia

Tajikistan

China

Maldives

Tanzania

Comoros

Mali

Thailand

Congo, DRC

Malta

Timor-Leste

Congo, Republic of

Mauritania

Togo

Costa Rica

Mauritius

Tonga

Côte d'Ivoire

Micronesia, FS

Tunisia

Croatia

Moldova

Turkey

Czech Republic

Mongolia

Turkmenistan

Denmark

Montenegro

Tuvalu

Djibouti

Morocco

Uganda

Dominica

Mozambique

Ukraine

Egypt

Myanmar

United Arab Emirates

Estonia

Namibia

United Kingdom

Ethiopia

Nepal

United States

Fiji, Republic of

Netherlands

Uruguay

Finland

New Zealand

Vanuatu

France

Nicaragua

Vietnam

Gabon

Niger

Yemen, Republic of

Gambia, The

Nigeria

Zambia

Georgia

Norway

Zimbabwe

Germany

Oman

 

Source: IMF.

   
 

1 Pledges based on the distribution of SDR 1.75 billion of the general reserve attributed to remaining windfall profits from the 2009–10 limited gold sales.



IMF COMMUNICATIONS DEPARTMENT

Public Affairs    Media Relations
E-mail: publicaffairs@imf.org E-mail: media@imf.org
Fax: 202-623-6220 Phone: 202-623-7100