## Temporary Modification to the Fund’s Annual Access Limits

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### Executive summary — background and key findings
- Under the Fund’s lending policies, requests for Fund financial support in excess of specified thresholds—the normal access limits—are subject to enhanced scrutiny under the Exceptional Access (EA) framework.
- Current normal annual access limits (NAALs) that trigger EA application:
  - 145 percent of quota for access to GRA resources.
  - 100 percent of quota for access to PRGT resources.
- COVID-19 context and emergency financing:
  - The Executive Board increased access limits under the Fund’s emergency financing instruments by 50 percent of quota for a period of 6 months (until October 5, 2020), subject to possible extension.
  - By June 25, the Fund had approved 72 requests for emergency financing amounting to SDR 18.5 billion (US$25.5 billion), most consisting of RCF and RFI requests.
- Key findings and problem statement:
  - Many countries have borrowed up to 100 percent of quota under emergency instruments and thus have little, if any, room to borrow additional resources from the Fund during the next 9-12 months without triggering EA scrutiny.
  - The pandemic shock implies large first-year financing needs; triggering EA scrutiny is less useful when high access reflects the exceptional global conjuncture rather than country-specific weaknesses.
  - NAALs act as thresholds that trigger enhanced scrutiny and are calibrated to amount to one-third of the respective NCALs, reflecting an average arrangement duration of three years.
  - Many countries that tapped full emergency financing have limited space for further financing during the subsequent 12 months without meeting the higher bar of the EA framework.

### Proposed temporary modifications (scope and duration)
- Temporary increases to NAALs to remain in place through April 6, 2021:
  - GRA NAAL: increase from 145 percent of quota to 245 percent of quota.
  - PRGT NAAL: increase from 100 percent of quota to 150 percent of quota.
- Executive Board to consider, by end-December 2020, the case for extending these temporary limits for a further period.
- Remove the limit on the number of disbursements under the Rapid Credit Facility (RCF) within a 12-month period (currently only two are allowed) while the temporary access increase for emergency financing is in place.
- Staff proposes consideration of possible changes to the Normal Cumulative Access Limit (NCAL) at a later point, drawing on experience.

### Proposed change to GRA NAAL — details, rationale, safeguards
- Proposal details:
  - Temporarily increase GRA NAAL from 145 to 245 percent of quota.
  - Apply to current arrangements and all new arrangements and Rapid Financing Instrument (RFI) requests; apply to augmentations or rephasing of access under existing or new arrangements approved through April 6, 2021.
  - Duration: applies to all 12-month periods that include some part of the period between the date of Board approval and April 6, 2021.
- Rationale:
  - Ensures countries that borrowed under the RFI have at least as much borrowing space under new arrangements agreed through April 6, 2021 without meeting EA procedural requirements.
  - In pandemic context, high 12-month access more likely reflects global developments than country-specific factors.
- Benefits and mitigating factors:
  - Facilitates timely resumption of UCT-quality lending while avoiding unwarranted frontloading of adjustment.
  - Creates space for more upfront disbursements under follow-up UCT-quality programs.
  - Helps avoid incentives for members to cancel or rephase current arrangements to free up space for RFI purchases.
- Safeguards remaining in place:
  - NCAL of 435 percent of quota remains in place, triggering additional scrutiny and procedural requirements under the EA framework if aggregate exposure exceeds this level.
  - Existing safeguards: requirements for financing assurances, capacity to repay, capacity to implement a UCT-quality program, and debt sustainability.
- Contingency planning:
  - Enhanced use of contingency planning envisaged as part of all UCT program requests with elevated access.
- Caveat:
  - Residual risks to Fund programs and resources remain given the uncertain length and severity of the shock.

### PRGT NAAL proposal, EAAL adjustment, and constraints
- Context and constraints:
  - Many PRGT-eligible countries face tight constraints accessing PRGT resources for UCT-quality programs without meeting PRGT Exceptional Access criteria.
  - Some countries that have drawn the full 100 percent of quota available under the RCF have no borrowing room within the NAAL for the ensuing 12 months.
  - Scope for increasing PRGT NAAL constrained by availability of PRGT loan and subsidy resources and Reserve Account coverage of lenders’ credit exposure.
  - Options for easing financing constraints to be taken up in the Review of Concessional Financing; initial Executive Board discussions expected before the Board’s August recess.
- Proposed change:
  - Temporarily increase PRGT NAAL from 100 to 150 percent of quota.
  - Apply to current arrangements and all new arrangements and RCF requests (and to augmentations or rephasing of access under existing or new arrangements) approved through April 6, 2021.
  - Duration: applies to all 12-month periods that include some part of the period between the date of Board approval and April 6, 2021.
- Exceptional Annual Access Limit (EAAL) for PRGT during same period:
  - Increase EAAL by 50 percent of quota, to 183.33 percent of quota.
- Risks and mitigation:
  - Risks similar to GRA (frontloading and bunching of repayments) partly offset by longer repayment and grace periods under PRGT facilities.
  - Key risk: impact of higher access on the Fund’s concessional resources, especially need for new subsidy resources despite success in fast-track mobilization of new PRGT loan resources.
- Review requirement:
  - PRGT access limits for this temporary period shall be reviewed no later than December 31, 2020.

### Relaxation of RCF disbursement rule — temporary suspension
- Current rule: no more than two RCF disbursements in a 12-month period.
- Proposal: temporarily relax (suspend) the “two-disbursement rule” until April 6, 2021.
- Rationale:
  - Pandemic shock expected to last an extended period and the temporary doubling of the limit on annual access under the RCF to 100 percent of quota makes the two-disbursement rule potentially unduly restrictive.
  - Suspension provides greater flexibility in using RCF access during the pandemic and avoids unnecessarily limiting annual emergency financing.
- Transitional provision:
  - Any RCF disbursement made between Board approval of the suspension and April 6, 2021 would not count towards the “two-disbursement” limit after April 6, 2021.

### Legal and Board decision actions proposed
- Two Decisions proposed for Executive Board adoption:
  - Decision I (GRA access decision):
    - Amend Decision on Access Policy and Limits on Overall Access to the Fund’s General Resources, and Exceptional Access Policy.
    - Amend paragraph 2 to specify temporary annual limit of 245 percent of quota during the Applicable Period ([date of Board approval of the decision] to April 6, 2021) for Eligible Financing and clarify computation over any 12-month period that includes any part of the Applicable Period.
    - Requires review of these access limits no later than December 31, 2020.
  - Decision II (PRGT amendments):
    - Amend PRGT Instrument to suspend counting disbursements toward the two-disbursement limit for the Applicable Period and restore the two-disbursement rule effective April 7, 2021.
    - Set temporary PRGT NAAL at 150 percent of quota and temporary PRGT EAAL at 183.33 percent of quota for the Applicable Period, applied to Eligible Financing and computed over any 12-month period including any part of the Applicable Period.
    - Require review of these PRGT access limits and the RCF disbursement limit no later than December 31, 2020.
- Draft redlined texts of the amendments are provided in Annexes.

### Operational and calculation notes; application window
- Annual access calculation:
  - Annual access is calculated on a gross basis during any rolling 12-month period; the availability date under the phasing provision of the approved arrangement is used for current arrangements, and past scheduled amounts are counted whether drawn or not.
  - For past RCF/RFI approvals, the date of approval of the outright loan/purchase should be used irrespective of whether the approved amount was drawn or not.
  - Clarifications apply to both the GRA and the PRGT and will be reflected in operational guidance, including the forthcoming revision to the 2017 Handbook of IMF Facilities for Low-Income Countries.
- Application window:
  - The proposed temporary NAAL increase applies to requests for new arrangements or RFI approved by the Board between the date of Board approval and April 6, 2021 (“the window”); and to augmentations or rephasing of access under arrangements in place as of the date of Board approval if approved during the window.
  - Illustrative temporary NAAL during the window: 245 percent of quota (applied to any 12-month period that includes at least one day between approval date and April 6, 2021).
  - Post-window NAAL: 145 percent of quota (applied to any 12-month period beginning on or after April 7, 2021).
  - Illustrative timeline identifies the Window as July 13, 2020 – April 5, 2021.

### Illustrative country examples (application of window)
- Country A (illustrative):
  - RFI purchase: April 15, 2020 — 100 percent of quota.
  - 18-month stand-by arrangement approved: November 15, 2020, with reviews every 6 months.
  - Because arrangement approved within the window:
    - NAAL of 245 percent of quota applies to 12-month periods that at least partly overlap with the window.
    - For first review with availability date May 15, 2021:
      - NAAL of 245 percent of quota applies to backward-looking 12-month window that includes availability date November 15, 2020.
      - NAAL of 145 percent applies to forward-looking 12-month window that includes availability date November 15, 2021.
    - A request for rephasing and augmentation at the first review would be subject to NAAL of 145 percent of quota for any 12-month period.
    - From the second review onward, NAAL of 145 percent applies to all 12-month periods.
- Country B (illustrative):
  - RFI purchase: April 15, 2020 — 100 percent of quota.
  - 18-month stand-by arrangement approved: April 30, 2021, with reviews every 6 months.
  - Because this arrangement falls outside the window:
    - Applicable annual limit on overall access to the GRA for any 12-month period is 145 percent of quota.

### Non-PRGT eligible countries — GRA credit outstanding (as of end-June 2020)
- Total number of Fund members that are not PRGT-eligible: 119 members.
- As of end-June 2020:
  - Number of these countries with no credit outstanding to the GRA: 87.
  - Two countries had credit outstanding in excess of 435 percent of quota: Argentina and Egypt.
- Countries with GRA credit outstanding exceeding 200 percent of quota (as of end-June 2020):
  - Ukraine — 397
  - Tunisia — 323
  - Mongolia — 317
  - Albania — 292
  - Pakistan — 275
  - Armenia — 247
  - Morocco — 240
  - Ecuador — 236
  - Gabon — 224
  - Barbados — 218
  - Jamaica — 206
- Distributional note:
  - With the cumulative access limit for the GRA set at 435 percent, the stock of credit outstanding determines the amount of additional net borrowing that the country can undertake without triggering the GRA exceptional access framework. Some of this net borrowing space may already be allocated to future purchases under existing arrangements.

### Annex II — PRGT Instrument (redlined excerpts)
- Governance:
  - The Instrument establishes the Poverty Reduction and Growth Trust (the “Trust”), administered by the Fund as Trustee (the “Trustee”).
- Section II. Trust Loans — Eligibility and conditions:
  - Paragraph 1(a): Members on the list annexed to Decision No. 8240-(86/56) SAF, as amended, “shall be eligible for assistance from the Trust.”
  - Paragraph 1(d) — Assistance under the RCF:
    - Trustee must be satisfied that:
      - (a) member is experiencing an urgent balance of payments need characterized by a financing gap that, if not addressed, would result in an immediate and severe economic disruption;
      - (b) member’s balance of payments difficulties are not predominantly caused by a withdrawal of financial support by donors; and
      - (c) normally, that the member either:
        - (i) has a balance of payments need expected to be resolved within one year with no major policy adjustments being necessary, or
        - (ii) lacks capacity to implement an upper credit tranche-quality economic program owing to limited policy implementation capacity or the urgent nature of its balance of payments need.
    - If a member has received an RCF disbursement within the preceding three years, additional disbursements may be approved only where the Trustee is satisfied that:
      - (i) the member’s balance of payments need was caused primarily by a sudden and exogenous shock, or
      - (ii) the member has established a track record of adequate macroeconomic policies for a period of normally about six-months prior to the request;
      - provided that:
        - (A) effective as of April 7, 2021, a member may not in any case receive more than two disbursements under the RCF during any 12-month period; and
        - (B) any disbursements between [date of approval of this decision] and April 6, 2021 shall not count towards the limit set forth in (A) above.
- Paragraph 2. Amount of Assistance — PRGT access limits and temporary adjustments:
  - Normal limits (sub-paragraph (a)(A)):
    - Annual limit: 100 percent of quota (the “normal annual access limit”).
    - Cumulative limit: 300 percent of quota, net of scheduled repayments (the “normal cumulative access limit”).
  - Exceptional access (sub-paragraph (a)(A)):
    - Absolute ceilings when exceptional access approved:
      - Maximum annual limit: 133.33 percent of quota (the “exceptional annual access limit”).
      - Maximum cumulative limit: 400 percent of quota, net of scheduled repayments (the “exceptional cumulative access limit”).
  - Temporary modification during the Applicable Period (sub-paragraph (a)(B)):
    - “During the period from [date of Board approval of the decision] to April 6, 2021 (the ‘Applicable Period’), the normal annual access limit and the exceptional annual access limit specified in sub-paragraph (A) above shall be 150 percent of quota and 183.33 percent of quota respectively,” provided that:
      - these limits apply to requests for new arrangements or RCFs and to requests for augmentation or rephasing of access, approved through April 6, 2021 (the “Eligible Financing”);
      - “for the computation of the annual access under the above specified ‘Eligible Financing’, the annual access limits of 150 percent of quota and 183.33 percent of quota shall apply for any 12-month period that includes any part of the ‘Applicable Period’.”

*International Monetary Fund — Temporary Modification to the Fund’s Annual Access Limits (excerpts).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Background and context
- Under the Fund’s lending policies, requests for Fund financial support in excess of specified thresholds—the normal access limits—are subject to enhanced scrutiny under the Exceptional Access (EA) framework.
- The normal annual access limits (NAALs) that trigger the application of the EA framework are currently:
  - 145 percent of quota for access to GRA resources.
  - 100 percent of quota for access to PRGT resources.
- The COVID-19 pandemic has caused a uniquely severe synchronized shock across the global economy, leading numerous member countries to request substantial financial assistance from the Fund.
- The Executive Board increased the access limits under the Fund’s emergency financing instruments by 50 percent of quota for a period of 6 months (until October 5, 2020), subject to a possible extension by the Executive Board.
- By June 25, the Fund had approved 72 requests for emergency financing amounting to SDR 18.5 billion (US$25.5 billion), most consisting of RCF and RFI requests.

### Key findings and problem statement
- Many countries have borrowed up to 100 percent of quota under the emergency instruments and thus have little, if any, room to borrow additional resources from the Fund during the next 9-12 months without triggering application of the EA framework.
- The intensity of the pandemic shock implies financing needs are expected to be large over the first year; triggering the EA framework is less useful when high access reflects the exceptional global conjuncture rather than country-specific weaknesses.
- Normal access limits do not act as a hard cap on financing but act as thresholds that trigger enhanced scrutiny; NAALs are calibrated to amount to one-third of the respective NCALs, reflecting an average arrangement duration of three years.
- Many countries that tapped the full amount of emergency financing have limited space for further financing during the subsequent 12 months without meeting the higher bar of the EA framework (see Box 2 examples and country counts as of June 12, 2020).

### Proposed temporary modifications
- Increase NAALs temporarily, to remain in place through April 6, 2021:
  - GRA NAAL: from 145 percent of quota to 245 percent of quota.
  - PRGT NAAL: from 100 percent of quota to 150 percent of quota.
- The Executive Board will consider, by end-December 2020, the case for extending these temporary limits for a further period.
- Remove the limit on the number of disbursements under the Rapid Credit Facility (RCF) within a 12-month period (currently only two are allowed) while the temporary access increase for emergency financing is in place, to provide greater flexibility in use of higher emergency financing levels.
- Staff proposes that consideration of possible changes to the Normal Cumulative Access Limit (NCAL) be undertaken at a later point, drawing on lessons from experience in the coming months.

### Rationale for the proposals
- In the pandemic context, requests for high levels of Fund financial assistance in the 12 months following the onset of the pandemic are more likely to reflect global developments than country-specific factors; the NAAL is consequently less useful at identifying cases where EA scrutiny is warranted.
- Significant concentration of Fund financing in a 12-month period appears warranted given the severe synchronized global shock and large immediate financing needs that do not necessarily reflect domestic policy weaknesses.
- Increasing NAALs temporarily allows for greater frontloading of access without automatically subjecting countries to the EA framework’s intensified scrutiny, while preserving the Fund’s safeguards and risk management objectives.

### Operational and calculation notes
- Annual access is calculated on a gross basis during any rolling 12-month period; the availability date under the phasing provision of the approved arrangement is used for current arrangements, and past scheduled amounts are counted whether drawn or not.
- For past RCF/RFI approvals, the date of approval of the outright loan/purchase should be used irrespective of whether the approved amount was drawn or not.
- The annual access calculation clarifications apply to both the GRA and the PRGT and will be reflected in operational guidance, including the forthcoming revision to the 2017 Handbook of IMF Facilities for Low-Income Countries.

### Timing and next steps
- Temporary increases to NAALs proposed to remain in place through April 6, 2021.
- Executive Board to consider, by end-December 2020, whether to extend these temporary limits.
- Staff will continue to evaluate the lending toolkit and related policies as the pandemic unfolds and will engage with the Executive Board as needed on options to support members.

*International Monetary Fund — Temporary Modification to the Fund’s Annual Access Limits, Executive Summary (June 30, 2020).*

### 11.      It is proposed that the NAAL for the GRA be temporarily increased from 145 to

### TEMPORARY MODIFICATION TO THE FUND’S ANNUAL ACCESS LIMITS

### Proposed change to GRA normal annual access limit (NAAL)
- It is proposed that the NAAL for the GRA be temporarily increased from 145 to 245 percent of quota.
- The increase would apply to:
  - current arrangements and all new arrangements and Rapid Financing Instrument (RFI) requests;
  - augmentations or rephasing of access under existing or new arrangements;
  - all such approvals made through April 6, 2021.
- Duration: the increase would apply to all 12-month periods that include some part of the period between the date of Board approval and April 6, 2021.
- Rationale: ensures countries that have borrowed under the RFI have at least as much borrowing space under new arrangements agreed through April 6, 2021 without meeting EA procedural requirements as they would have had absent the COVID-19 shock and associated RFI drawing.

### Benefits, risks, and safeguards for the GRA increase
- Benefits and mitigating factors:
  - Facilitates timely resumption of UCT-quality lending while avoiding unwarranted frontloading of adjustment.
  - Creates space for more upfront disbursements under follow-up UCT-quality programs, reducing program risks where upfront adjustment is not required or recommended.
  - Helps avoid incentives for members to cancel or rephase current arrangements to free up space for RFI purchases.
- Safeguards remaining in place:
  - NCAL of 435 percent of quota remains in place, triggering additional scrutiny and procedural requirements under the EA framework if aggregate exposure (including prospective drawings net of scheduled repurchases) exceeds this level.
  - Other existing safeguards: requirements for financing assurances, capacity to repay, capacity to implement a UCT-quality program, and debt sustainability.
- Contingency planning:
  - Enhanced use of contingency planning is envisaged as an integral part of all UCT program requests with elevated levels of access to mitigate residual risks (e.g., a longer pandemic shock producing higher financing needs).
- Caveat:
  - Residual risks to Fund programs and resources remain given the uncertain length and severity of the shock.

### PRGT (concessional) NAAL proposal and constraints
- Context:
  - Many PRGT-eligible countries face tight constraints accessing PRGT resources for UCT-quality programs without meeting PRGT Exceptional Access (EA) criteria.
  - Some countries that have drawn the full 100 percent of quota available under the RCF have no borrowing room within the NAAL for the ensuing 12 months.
  - Scope for increasing the PRGT NAAL is constrained by availability of PRGT loan and subsidy resources and Reserve Account coverage of lenders’ credit exposure.
  - Options for easing financing constraints to be taken up in the Review of Concessional Financing; initial Executive Board discussions expected before the Board’s August recess.
- Proposed change:
  - Temporarily increase the NAAL for the PRGT from 100 to 150 percent of quota.
  - Apply to current arrangements and all new arrangements and RCF requests (and to augmentations or rephasing of access under existing or new arrangements) approved through April 6, 2021.
  - Duration: the increase would apply to all 12-month periods that include some part of the period between the date of Board approval and April 6, 2021.
- Exceptional Annual Access Limit (EAAL) for PRGT:
  - Accompanying temporary increase in the EAAL by 50 percent of quota, to 183.33 percent, for the same period.
- Risks and mitigation:
  - Risks similar to the GRA case (frontloading and bunching of repayments) are partly offset by longer repayment and grace periods under PRGT facilities.
  - Key risk: impact of higher access on the Fund’s concessional resources, especially need for new subsidy resources despite success in fast-track mobilization of new PRGT loan resources.
- Review:
  - The access limits set out in the PRGT Instrument for this temporary period shall be reviewed no later than December 31, 2020.

### Relaxation of RCF disbursement rule
- Current rule: no more than two RCF disbursements in a 12-month period (designed to prevent repeated RCF use for a series of exogenous shocks).
- Proposal: temporarily relax (suspend) the “two-disbursement rule” until April 6, 2021.
- Rationale:
  - Pandemic shock is expected to last an extended period and the temporary doubling of the limit on annual access under the RCF to 100 percent of quota makes the two-disbursement rule potentially unduly restrictive.
  - Suspension provides greater flexibility in using RCF access over the course of the pandemic and avoids unnecessarily limiting annual emergency financing.
- Transitional provision:
  - Any RCF disbursement made between Board approval of the suspension and April 6, 2021 would not count towards the “two-disbursement” limit after April 6, 2021.

### Legal/decision actions proposed
- Two Decisions proposed for Executive Board adoption:
  - Decision I: Amendments to the Decision on Access Policy and Limits on Overall Access to the Fund’s General Resources, and Exceptional Access Policy (GRA access decision).
    - Amends paragraph 2 to specify the temporary annual limit of 245 percent of quota during the Applicable Period ([date of Board approval of the decision] to April 6, 2021) for Eligible Financing and clarifies computation over any 12-month period that includes any part of the Applicable Period.
    - Requires review of these access limits no later than December 31, 2020.
  - Decision II: Amendments to the PRGT Instrument.
    - Temporarily revises PRGT Section II, Paragraph 1(d)(2) to suspend counting disbursements toward the two-disbursement limit for the Applicable Period and to restore the two-disbursement rule effective April 7, 2021.
    - Revises Section II, Paragraph 2(a) to set the temporary normal annual access limit at 150 percent of quota and the exceptional annual access limit at 183.33 percent of quota for the Applicable Period, with those limits applying to Eligible Financing and computed over any 12-month period including any part of the Applicable Period.
    - Requires review of these PRGT access limits and the RCF disbursement limit no later than December 31, 2020.
- Draft redlined texts of the amendments are provided for Executive Directors’ convenience in Annexes.

*Source: Temporary Modification to the Fund’s Annual Access Limits (excerpts).*

### Annex II. Instrument to Establish the Poverty Reduction and

### Annex II. Instrument to Establish the Poverty Reduction and Growth Trust—Redlined Version

### Introductory provisions and governance
- The Instrument establishes the Poverty Reduction and Growth Trust (the “Trust”), administered by the Fund as Trustee (the “Trustee”).
- The Trust “shall be governed by and administered in accordance with the provisions of this instrument.”

### Section II. Trust Loans — Eligibility and Conditions for Assistance
- Paragraph 1(a): Members on the list annexed to Decision No. 8240-(86/56) SAF, as amended, “shall be eligible for assistance from the Trust.”
- Paragraph 1(d) — Assistance under the RCF:
  - Before approving a disbursement under the RCF, the Trustee shall be satisfied that:
    - (a) the member is experiencing an urgent balance of payments need characterized by a financing gap that, if not addressed, would result in an immediate and severe economic disruption;
    - (b) the member’s balance of payments difficulties are not predominantly caused by a withdrawal of financial support by donors; and
    - (c) normally, that the member either
      - (i) has a balance of payments need that is expected to be resolved within one year with no major policy adjustments being necessary, or
      - (ii) lacks capacity to implement an upper credit tranche-quality economic program owing to its limited policy implementation capacity or the urgent nature of its balance of payments need.
  - If a member has received a disbursement under the RCF within the preceding three years, any additional disbursements under the RCF may be approved only where the Trustee is satisfied that:
    - (i) the member’s balance of payments need was caused primarily by a sudden and exogenous shock, or
    - (ii) the member has established a track record of adequate macroeconomic policies for a period of normally about six-months prior to the request;
    - provided that:
      - (A) effective as of April 7, 2021, a member may not in any case receive more than two disbursements under the RCF during any 12-month period; and
      - (B) any disbursements between [date of approval of this decision] and April 6, 2021 shall not count towards the limit set forth in (A) above.

### Paragraph 2. Amount of Assistance — PRGT access limits and temporary adjustments
- Normal limits (sub-paragraph (a)(A)):
  - Annual limit: 100 percent of quota (the “normal annual access limit”).
  - Cumulative limit: 300 percent of quota, net of scheduled repayments (the “normal cumulative access limit”).
- Exceptional access (sub-paragraph (a)(A)):
  - Conditions for access in excess of normal limits include: exceptionally large balance of payments need, comparatively strong adjustment program and ability to repay, no sustained past access to international financial markets, and income at or below the prevailing operational cutoff for IDA.
  - Absolute ceilings when exceptional access is approved:
    - Maximum annual limit: 133.33 percent of quota (the “exceptional annual access limit”).
    - Maximum cumulative limit: 400 percent of quota, net of scheduled repayments (the “exceptional cumulative access limit”).
  - Definition of “sustained past access to international financial markets”: in addition to having income above 80 percent of the IDA operational cutoff, the public debtor has issued or guaranteed external bonds or has received disbursements under external commercial loans contracted or guaranteed by the public debtor, as defined in Executive Board Decision No. 14521-(10/3), as amended, during at least two of the past five years in a cumulative amount equivalent to at least 25 percent of the member’s quota.
- Temporary modification during the Applicable Period (sub-paragraph (a)(B)):
  - “During the period from [date of Board approval of the decision] to April 6, 2021 (the ‘Applicable Period’), the normal annual access limit and the exceptional annual access limit specified in sub-paragraph (A) above shall be 150 percent of quota and 183.33 percent of quota respectively,” provided that:
    - these limits apply to requests for new arrangements or RCFs and to requests for augmentation or rephasing of access, approved through April 6, 2021 (the “Eligible Financing”);
    - “for the computation of the annual access under the above specified ‘Eligible Financing’, the annual access limits of 150 percent of quota and 183.33 percent of quota shall apply for any 12-month period that includes any part of the ‘Applicable Period’.”

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### Temporary Modification to the Fund’s Annual Access Limits — Supplementary Information

### Executive summary and authorship
- Paper provides background on the proposal for a temporary modification to the Fund’s annual access limits.
- Approved by Thomas Krueger, Yan Liu, and Seán Nolan.
- Prepared by Strategy, Policy, and Review Department; Legal Department; and Finance Department under overall guidance of Vitaliy Kramarenko.

### How annual access limits operate — principles and application
- The current normal annual access limit (NAAL) for the GRA is stated as 145 percent of quota.
- Application of the NAAL requires consideration of the member’s access to GRA resources in any 12-month period on a rolling basis, combining forward- and backward-looking elements.
- For a three-year GRA arrangement approved at date T:
  - The phasing of purchases is within the NAAL when access to GRA resources during any twelve-month period from date T+1 day of the previous year through the end of the arrangement does not exceed 145 percent of quota.
- Same principle applies to:
  - Requests for augmentation or rephasing of access under an arrangement; and
  - Requests for a purchase under the RFI approved by the Board at date T, where the RFI purchase is within the NAAL when access to GRA resources during any 12-month period from date T+1 of the previous year through date T-1 day of the next year does not exceed 145 percent of quota.

### Application of the proposed temporary access limit increase (the “window”)
- The proposed temporary NAAL increase applies to:
  - Requests for new arrangements or RFI approved by the Board between the date of Board approval of the increase and April 6, 2021 (“the window”); and
  - Requests for augmentation or rephasing of access under arrangements in place as of the date of Board approval if approved by the Board during the window.
- Illustrative application:
  - Proposed temporary NAAL during the window: 245 percent of quota (applied to any 12-month period that includes at least one day between the approval date and April 6, 2021).
  - Post-window NAAL: 145 percent of quota (applied to any 12-month period beginning on or after April 7, 2021).
  - Different annual access limits (245 and 145 percent of quota) may apply during an arrangement; an arrangement initially within normal access can become exceptional if an augmentation or rephasing is approved after April 6, 2021, as that augmentation/rephasing would be assessed against 145 percent of quota.

### Examples (illustrative applications)
- Country A (Figure 1):
  - RFI purchase: April 15, 2020 — 100 percent of quota.
  - 18-month stand-by arrangement approved: November 15, 2020, with reviews every 6 months.
  - Because the arrangement is approved within the window:
    - NAAL of 245 percent of quota applies to 12-month periods that at least partly overlap with the window.
    - For the first review with availability date of May 15, 2021:
      - The NAAL of 245 percent of quota applies to the backward-looking 12-month window that includes availability date November 15, 2020.
      - The NAAL of 145 percent applies to the forward-looking 12-month window that includes availability date November 15, 2021.
    - A request for rephasing and augmentation at the first review would be subject to a NAAL of 145 percent of quota for any 12-month period.
    - From the second review onward, NAAL of 145 percent of quota applies to all 12-month periods as all fall outside the window.
- Country B (Figure 2):
  - RFI purchase: April 15, 2020 — 100 percent of quota.
  - 18-month stand-by arrangement approved: April 30, 2021, with reviews every 6 months.
  - Because this arrangement falls outside the window:
    - Applicable annual limit on overall access to the GRA for any 12-month period is 145 percent of quota.
    - Purchases within any 12-month period cannot exceed 145 percent of quota to remain within normal access.

### The window (timing)
- The Window is identified as July 13, 2020 – April 5, 2021 in the illustrative timeline.

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### Non-PRGT Eligible Countries — GRA Credit Outstanding (as of end-June 2020)

- Total number of Fund members that are not PRGT-eligible: 119 members.
- As of end-June 2020:
  - Number of these countries with no credit outstanding to the GRA: 87.
  - Two countries had credit outstanding in excess of 435 percent of quota: Argentina and Egypt.
- Distributional note: With the cumulative access limit for the GRA set at 435 percent, the stock of credit outstanding determines the amount of additional net borrowing that the country can undertake without triggering the application of the GRA exceptional access framework. Some of this net borrowing space may already be allocated to future purchases under existing arrangements.

- Countries with GRA credit outstanding exceeding 200 percent of quota (as of end-June 2020):
  - Ukraine — 397
  - Tunisia — 323
  - Mongolia — 317
  - Albania — 292
  - Pakistan — 275
  - Armenia — 247
  - Morocco — 240
  - Ecuador — 236
  - Gabon — 224
  - Barbados — 218
  - Jamaica — 206

- Overview histogram categories shown (as of end-June 2020):
  - 0
  - 1-100
  - 101-150
  - 151-200
  - over 200
  - (Number of countries by outstanding credit (percent of quota) illustrated in Figure 3)

*Source: Annex II. Instrument to Establish the Poverty Reduction and Growth Trust—Redlined Version; Temporary Modification to the Fund’s Annual Access Limits—Supplementary Information (as provided in the source content).*

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_Source: https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020036.pdf_