## The Policy Support Instrument (PSI)

## Source details

**Canonical URL:** [The Policy Support Instrument (PSI)](https://www.imf.org/-/media/files/factsheets/english/2023-policy-support-instrument.pdf)

## Other formats

- [Markdown version](/-/media/files/factsheets/english/2023-policy-support-instrument.pdf.md)
- [Structured JSON version](/-/media/files/factsheets/english/2023-policy-support-instrument.pdf.json)

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### Purpose
- Promote a close policy dialogue between the IMF and an eligible member country.
- Assist the country in implementing economic policies and reforms aimed at maintaining or consolidating macroeconomic stability and debt sustainability.
- Deliver signals to donors, creditors, and the general public on the strength of the country’s economic policies.

### Eligibility
- All PRGT-eligible countries that have no current or prospective balance of payments needs requiring any significant macroeconomic policy adjustment.
- Countries that may still benefit from structural reforms supporting poverty reduction and growth.
- Countries that have institutions of sufficient quality to support continued good performance.

### Conditionality
- PSI-supported programs should include policies to consolidate macroeconomic stability consistent with durable poverty reduction and growth objectives, analogous to ECF and SCF arrangements.
- For PSIs with an initial duration exceeding two years, a Poverty Reduction and Growth Strategy (PRGS) should be issued to the IMF Executive Board for completion of the second and subsequent reviews.
- The PRGS describes countries’ macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing.

### Review modalities
- Reviews take place on a fixed schedule, normally every six months, to provide regular feedback on program performance and update program design as needed.
- If performance is not sufficiently strong, a review would not be completed; bringing a PSI-supported program back on track requires corrective actions and completion of the next scheduled review.
- The noncompletion of two consecutive scheduled reviews signifies the lack of Board endorsement of the member’s policies, and the PSI would automatically lapse.
- The PSI does not involve a review-based monitoring of program targets; waivers for nonobservance must be requested to the Board for missed targets.
- Waivers of applicability are not possible under a PSI.

### Use with financial instruments
- Can be used in conjunction with the RCF or SCF if short-term financing needs arise.
- Can be used with a precautionary SCF in periods of increased uncertainty or risk.
- Cannot be used concurrently with the ECF.

### Terms
- Duration:
  - 1-4 years, but can be extended up to a maximum of 5 years.
- Cost:
  - No cost.
- Access:
  - Successive PSIs may be requested as long as the country continues to qualify.

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_Source: https://www.imf.org/-/media/files/factsheets/english/2023-policy-support-instrument.pdf_