## ppea2023031 - EXECUTIVE SUMMARY

## Source details

**Canonical URL:** [ppea2023031 - EXECUTIVE SUMMARY](https://www.imf.org/-/media/files/publications/pp/2023/english/ppea2023031.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/pp/2023/english/ppea2023031.pdf.md)
- [Structured JSON version](/-/media/files/publications/pp/2023/english/ppea2023031.pdf.json)

---

### Executive summary and recommended forward strategy
- In December 2021 the Executive Board called on staff to propose by June 2023 a forward strategy for the Cumulative Access Limits (CALs) of the Fund’s emergency financing (EF).
- In 2020 the CALs for the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF) were temporarily increased by 50 percent of quota to 150 percent of quota from the earlier 100 percent of quota; the AALs were similarly increased and later restored in December 2021.
- Absent a new decision, the CALs will revert to pre-pandemic levels on July 1, 2023.
- Staff proposes:
  - Maintain the CAL under the regular window of the RFI at 150 percent of quota (and at 183.33 percent for the Large Natural Disaster (LND) window) until end-June 2024, reverting to 100 percent of quota on July 1, 2024.
  - Maintain the CAL for the exogenous shock (ES) window of the RCF at 150 percent of quota (and at 183.33 percent for the LND window) until the date of the completion of the comprehensive review of PRGT facilities and funding planned for 2024/25.
- Objective: ensure the Fund can continue to support members that accessed EF during the COVID-19 pandemic in case of renewed emergencies, while limiting associated risks.

### Rationale and context
- Reverting higher EF CALs to pre-pandemic levels on July 1, 2023 would:
  - Leave many countries that used the RFI and/or RCF during the pandemic with little or no borrowing space under EF instruments.
  - Result in borrowing space being replenished only gradually in line with repurchases/repayments of financing disbursed in Spring 2020.
  - Undermine the Fund’s ability to support these countries effectively in the near term when UCT-quality programs are not feasible or not necessary.
- The current global environment motivating caution:
  - Low growth and sizable downside risks following several years of sizeable shocks that have strained buffers in many countries.
  - The war in Ukraine significantly increased prices for food, fertilizers, and energy, adding to inflationary pressures and tighter market access conditions, especially for low-income countries (LICs).
- EF qualification and usage evidence:
  - Transition from EF to UCT-quality programs already took place in 2021.
  - Qualification requirements for EF have been effective in ensuring EF is not accessed when a UCT-quality program is feasible and necessary, limiting potential impact on Fund resources.

### Background on temporary access modifications
- April 2020 modifications in response to COVID-19 (changes preserved exactly as in source):
  - RFI regular window and RCF ES window: AAL and CAL temporarily raised by 50 percent of quota to 100 and 150 percent of quota from the earlier levels of 50 and 100 percent of quota, respectively.
  - RFI/RCF LND windows: AAL and CAL increased by 50 percent of quota to 130 and 183.33 percent of quota, respectively, through end-2021.
- December 2021 Board decisions:
  - AAL for RFI and RCF restored to pre-pandemic levels: 50 percent of quota (RFI regular and RCF ES windows) and 80 percent of quota (LND window).
  - CALs maintained at temporarily higher levels until end-June 2023: 150 percent of quota (RFI regular/RCF ES windows) and 183.33 percent of quota (RFI/RCF LND window).
  - Default reversion (absent new decision) on July 1, 2023 to pre-pandemic CALs: 100 percent of quota (RFI regular/RCF ES windows) and 133.33 percent of quota (RFI/RCF LND window).

### Use of EF and UCT-quality programs since April 2021 through April 2023
- UCT-quality program support provided for most BOP needs in this period:
  - 39 new arrangements with SDR 103.4 billion in commitments, including:
    - seven EFFs, SDR 37.6 billion
    - three SBAs, SDR 2.2 billion
    - seven precautionary arrangements (FCL/PLL/SLL), SDR 50.5 billion
    - six ECF-EFF blended arrangements, SDR 5.7 billion
    - one SBA-SCF blended arrangement, SDR 0.5 billion
    - 12 ECFs, SDR 6.7 billion
    - three PCIs
  - 11 cases of EF (most in 2021 or under the Food Shock Window (FSW)), including:
    - RCF LND for Saint Vincent and the Grenadines (July 2021)
    - EF operations in September-October 2021 for Burundi (RCF), Equatorial Guinea (RFI), and Tanzania (RFI/RCF blend)
    - RFI for Ukraine (March 2022)
    - Six FSW disbursements between October 2022 and March 2023: Burkina Faso, Guinea, Haiti, Malawi, South Sudan, and Ukraine
- Food Shock Window (FSW) details:
  - Introduced September 2022 to support urgent BOP needs from the global food shock.
  - Offers total access of up to 50 percent of quota, additional to existing AAL.
  - For countries using the FSW, the CAL under the RFI regular window and RCF ES window increased to 175 percent of quota.

### Challenges of reverting to pre-pandemic CALs on July 1, 2023
- Most countries that accessed EF since 2020 would have zero borrowing space under EF on July 1, 2023 (available access = CAL minus cumulative outstanding credit under EF).
- Specific repayment/repurchase timelines affecting restoration of borrowing space:
  - RFI repurchases are due after 3¼ years of grace period and with 5-year maturity. Most RFI countries would restore:
    - borrowing space of 50 percent of quota by end-June 2024
    - borrowing space of 100 percent of quota by end-2025
  - RCF repayments are due after 5½ years of grace period and within a 10-year maturity. Most PRGT-eligible RCF members would have less than 50 percent borrowing space until end-June 2027.
- Blended RFI-RCF cases:
  - Presumed blenders would generally have no EF borrowing space on July 1, 2023.
  - They would restore borrowing space more slowly than RFI-only countries but more quickly than RCF-only countries due to faster repurchase of the RFI portion.

### Staff view and proposal (summary)
- Staff view:
  - Leaving a large number of countries without any EF borrowing space in case of urgent BOP needs would not be appropriate in the current difficult economic context.
  - Countries for which a UCT-quality program is not feasible would be exposed to risks, in particular PRGT-eligible countries given the relatively longer repayment period of RCF credit borrowed during the COVID-19 pandemic.
  - Returning to pre-pandemic EF CALs that limit RCF access may reduce external financing available from other sources, given the catalytic role played by the Fund’s financial support.
- Staff’s proposal:
  - RFI:
    - Maintain the CAL at 150 percent of quota (and at 183.33 percent of quota for the LND window) until end-June 2024.
    - CAL would revert to the pre-pandemic level of 100 percent of quota (and 133.33 percent of quota for the LND window) on July 1, 2024.
  - RCF:
    - Maintain the CAL at 150 percent of quota (and at 183.33 percent of quota for the LND window) until the date of the Board completion of the comprehensive review of PRGT facilities planned for 2024/25.
    - The 2024/25 comprehensive review of PRGT facilities is expected to assess key policies for concessional financing including access policy for the RCF.
  - Presumed blenders (2:1 GRA:PRGT blending mix):
    - RFI portion of emergency financing would be subject to pre-pandemic CALs on July 1, 2024.
    - RCF portion would remain subject to temporarily higher CALs until the PRGT review in 2024/25.

### Emergency Financing access limits — key numeric points
- RFI regular window:
  - Annual Access Limit: 50; remains 50 in all periods.
  - Cumulative Access Limit: current 150; existing Board decision 100; proposed 150 (7/1/2023-6/30/2024); proposed 100 (7/1/2024 and onwards).
- RFI LND window:
  - Annual Access Limit: 80 in all periods.
  - Cumulative Access Limit: current 183.33; existing 133.33; proposed 183.33 (7/1/2023-6/30/2024); proposed 133.33 (7/1/2024 and onwards).
- RCF regular window (PRGT-eligible):
  - Annual Access Limit: 50 in all periods.
  - Cumulative Access Limit: 100 in all periods (current and proposed as shown).
- RCF ES window:
  - Annual Access Limit: 50 in all periods.
  - Cumulative Access Limit: current 150; existing 100; proposed 150 (7/1/2023-PRGT review); proposed 100 (PRGT review and onwards).
- RCF LND window:
  - Annual Access Limit: 80 in all periods.
  - Cumulative Access Limit: current 183.33; existing 133.33; proposed 183.33 (7/1/2023-PRGT review); proposed 133.33 (PRGT review and onwards).
- Footnotes preserved:
  - 1/ Outstanding disbursements (purchases) from all other RCF (RFI) windows are included in the calculation of the annual and cumulative access.
  - 2/ Any RFI access also counts towards RCF limits.
  - 3/ For RCF ES and LND windows, the CAL would return to pre-pandemic levels on the date of completion of the comprehensive PRGT review.

### Expected effects on borrowing space
- The proposal would ensure most countries have at least 50 percent of quota in borrowing space under EF instruments over the coming years while pandemic-era outstanding EF balances are being repaid.
- Member countries that accessed financing under the RFI would in most cases maintain at least 50 percent of quota of borrowing space under the RFI, initially due to higher CALs and later reflecting gradual repurchases.
- PRGT-eligible members that accessed RCF financing would in most cases maintain at least 50 percent of quota in EF borrowing space over the next years due to the extension of higher CALs.
- Countries that accessed blended RFI-RCF financing would maintain at least 50 percent of quota in EF borrowing space until July 1, 2024, after which most would have borrowing space restored to 50 percent of quota due to repurchase of the RFI portion combined with continued higher RCF limits.

### Enterprise risks identified and assessment
- Types of enterprise risks from extending EF CAL:
  1. Financial risks to Fund credit and adequacy and liquidity of lending resources.
  2. Reputational credibility risk that extension could lead to more reliance on EF than UCT-quality programs.
  3. Human capital risks given staffing resource constraints for country teams and administering the policy.
- Assessment and mitigating points:
  - Financial risks from extending EF CAL are assessed as low/moderate under both GRA and PRGT lending.
  - Since April 2021, the Fund has provided financial assistance for most countries experiencing BOP needs through UCT-quality programs rather than EF.
  - EF constituted only 2.1 percent of total Fund financial assistance approved in FY2022.
  - Shortfalls in subsidy contributions, higher interest rates, and stronger demand for PRGT borrowing are straining PRGT finances; IMFC has supported reaching the 2021 funding targets and advancing work to put the PRGT on a sustainable footing.
  - Risk that countries would opt for EF instead of UCT-quality programs is assessed as low due to:
    - Rigorous application of qualification requirements for RCF and RFI.
    - Continued application of standard safeguards, including debt sustainability and adequate capacity to repay.
    - EF financing constrained by annual and cumulative access limits (hard caps).
    - RCF disbursements limited to two times in any 12-month period (except Food Shock Window).
    - Prior actions and policy commitments remain applicable to EF requests.
  - Human capital risk judged low/moderate and addressed by resource reallocation and project prioritization.
- Risks from not extending the CAL:
  - Multi-dimensional and could outweigh risks from extension.
  - April 2023 World Economic Outlook: growth forecast for 2023 is anemic with downside risks.
  - High risks of climate-related shocks, including El Nino in 2023, warrant adequate EF borrowing space where UCT-quality programs may not be feasible or necessary.
  - Leaving many qualifying countries without EF access could increase enterprise risk in terms of member engagement and potential reputational risks if some face severe exogenous shocks.

### Resource implications
- Proposed strategy is not expected to have significant resource implications.
- At the December 2021 review, temporary extension of higher CALs was assessed to have limited impact on GRA and PRGT resources; this assessment has not changed significantly.
- Use of RFI has been very limited since April 2021.
- Further temporary extension of higher CALs for the RCF is not expected to have an additional significant effect on demand for PRGT resources and on PRGT subsidy needs beyond baseline projections presented to the Board on April 6, 2023.
- Assumes EF would only be available for qualifying countries for whom a UCT-quality program is either not feasible or not necessary.
- The lower AAL (50 percent of quota for the RCF ES window and RFI regular window, and 80 percent of quota for the RCF and RFI LND window) in place since December 2021 limit potential resource implications.

### Issues for discussion (questions to Directors)
- Do Directors agree with extending temporarily higher CAL for RFI:
  - 150 percent of quota for the RFI regular window and 183.33 percent of quota for the RFI LND window until end-June 2024?
- Do Directors agree with extending temporarily higher CAL for RCF:
  - 150 percent of quota for the RCF ES window and 183.33 percent of quota for the RCF LND window until the 2024/25 comprehensive review of PRGT Facilities?

### Proposed Executive Board decisions (high-level)
- Decision I: Amend RFI Decision to extend references of the higher CAL period from “from April 6, 2020 to June 30, 2023” to “from April 6, 2020 to June 30, 2024” and related date adjustments from June 21, 2021 to June 30, 2024 in paragraph 5B.
- Decision II: Amend PRGT Instrument to change date references:
  - Revise “from June 21, 2021 to June 30, 2023” to “from June 21, 2021 to the date of the Executive Board decision completing the next Comprehensive Review of PRGT facilities in 2024/25.”
  - Revise “from April 6, 2020 to June 30, 2023” to “from April 6, 2020 to the date of the Executive Board decision completing the next Comprehensive Review of PRGT facilities in 2024/25 by the Executive Board.”

*Source: REVIEW OF THE CUMULATIVE ACCESS LIMITS UNDER THE RFI AND THE RCF (IMF staff text provided).*

### EXECUTIVE SUMMARY

### ppea2023031 - EXECUTIVE SUMMARY

### Executive summary and recommended forward strategy
- In December 2021 the Executive Board called on staff to propose by June 2023 a forward strategy for the Cumulative Access Limits (CALs) of the Fund’s emergency financing (EF).
- In 2020 the CALs for the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF) were temporarily increased by 50 percent of quota to 150 percent of quota from the earlier 100 percent of quota; the AALs were similarly increased and later restored in December 2021.
- Absent a new decision, the CALs will revert to pre-pandemic levels on July 1, 2023.
- Staff proposes:
  - Maintain the CAL under the regular window of the RFI at 150 percent of quota (and at 183.33 percent for the Large Natural Disaster (LND) window) until end-June 2024, reverting to 100 percent of quota on July 1, 2024.
  - Maintain the CAL for the exogenous shock (ES) window of the RCF at 150 percent of quota (and at 183.33 percent for the LND window) until the date of the completion of the comprehensive review of PRGT facilities and funding planned for 2024/25.
- Objective: ensure the Fund can continue to support members that accessed EF during the COVID-19 pandemic in case of renewed emergencies, while limiting associated risks.

### Rationale and context
- Reverting higher EF CALs to pre-pandemic levels on July 1, 2023 would:
  - Leave many countries that used the RFI and/or RCF during the pandemic with little or no borrowing space under EF instruments.
  - Result in borrowing space being replenished only gradually in line with repurchases/repayments of financing disbursed in Spring 2020.
  - Undermine the Fund’s ability to support these countries effectively in the near term when UCT-quality programs are not feasible or not necessary.
- The current global environment motivating caution:
  - Low growth and sizable downside risks following several years of sizeable shocks that have strained buffers in many countries.
  - The war in Ukraine significantly increased prices for food, fertilizers, and energy, adding to inflationary pressures and tighter market access conditions, especially for low-income countries (LICs).
- EF qualification and usage evidence:
  - Transition from EF to UCT-quality programs already took place in 2021.
  - Qualification requirements for EF have been effective in ensuring EF is not accessed when a UCT-quality program is feasible and necessary, limiting potential impact on Fund resources.

### Background on temporary access modifications
- April 2020 modifications in response to COVID-19 (changes preserved exactly as in source):
  - RFI regular window and RCF ES window: AAL and CAL temporarily raised by 50 percent of quota to 100 and 150 percent of quota from the earlier levels of 50 and 100 percent of quota, respectively.
  - RFI/RCF LND windows: AAL and CAL increased by 50 percent of quota to 130 and 183.33 percent of quota, respectively, through end-2021.
- December 2021 Board decisions:
  - AAL for RFI and RCF restored to pre-pandemic levels: 50 percent of quota (RFI regular and RCF ES windows) and 80 percent of quota (LND window).
  - CALs maintained at temporarily higher levels until end-June 2023: 150 percent of quota (RFI regular/RCF ES windows) and 183.33 percent of quota (RFI/RCF LND window).
  - Default reversion (absent new decision) on July 1, 2023 to pre-pandemic CALs: 100 percent of quota (RFI regular/RCF ES windows) and 133.33 percent of quota (RFI/RCF LND window).

### Use of EF and UCT-quality programs since April 2021 through April 2023
- UCT-quality program support provided for most BOP needs in this period:
  - 39 new arrangements with SDR 103.4 billion in commitments, including:
    - seven EFFs, SDR 37.6 billion
    - three SBAs, SDR 2.2 billion
    - seven precautionary arrangements (FCL/PLL/SLL), SDR 50.5 billion
    - six ECF-EFF blended arrangements, SDR 5.7 billion
    - one SBA-SCF blended arrangement, SDR 0.5 billion
    - 12 ECFs, SDR 6.7 billion
    - three PCIs
  - 11 cases of EF (most in 2021 or under the Food Shock Window (FSW)), including:
    - RCF LND for Saint Vincent and the Grenadines (July 2021)
    - EF operations in September-October 2021 for Burundi (RCF), Equatorial Guinea (RFI), and Tanzania (RFI/RCF blend)
    - RFI for Ukraine (March 2022)
    - Six FSW disbursements between October 2022 and March 2023: Burkina Faso, Guinea, Haiti, Malawi, South Sudan, and Ukraine
- Food Shock Window (FSW) details:
  - Introduced September 2022 to support urgent BOP needs from the global food shock.
  - Offers total access of up to 50 percent of quota, additional to existing AAL.
  - For countries using the FSW, the CAL under the RFI regular window and RCF ES window increased to 175 percent of quota.

### Challenges of reverting to pre-pandemic CALs on July 1, 2023
- Most countries that accessed EF since 2020 would have zero borrowing space under EF on July 1, 2023 (available access = CAL minus cumulative outstanding credit under EF).
- Specific repayment/repurchase timelines affecting restoration of borrowing space:
  - RFI repurchases are due after 3¼ years of grace period and with 5-year maturity. Most RFI countries would restore:
    - borrowing space of 50 percent of quota by end-June 2024
    - borrowing space of 100 percent of quota by end-2025
  - RCF repayments are due after 5½ years of grace period and within a 10-year maturity. Most PRGT-eligible RCF members would have less than 50 percent borrowing space until end-June 2027.
- Blended RFI-RCF cases:
  - Presumed blenders would generally have no EF borrowing space on July 1, 2023.
  - They would restore borrowing space more slowly than RFI-only countries but more quickly than RCF-only countries due to faster repurchase of the RFI portion.

### Enterprise risks and resource implications (high-level)
- Staff assesses that risks of extending temporarily higher CALs are limited because:
  - Transition to UCT-quality programs has occurred.
  - EF qualification requirements have constrained inappropriate EF usage.
- The proposed limited extension aims to balance readiness to respond to emergencies with limiting potential impacts on Fund resources.
- Detailed enterprise risk analysis and resource implications are presented in the full paper.

### Issues for Executive Directors’ consideration (as presented)
- Whether to approve the staff proposal to:
  - Maintain RFI CAL at 150 percent of quota (183.33 percent for LND) until end-June 2024, reverting to 100 percent of quota on July 1, 2024.
  - Maintain RCF CAL at 150 percent of quota (183.33 percent for LND) until the completion of the comprehensive review of PRGT facilities and funding planned for 2024/25.
- Consider the trade-off between preserving EF borrowing space for members with exhausted access and containing enterprise risk through existing qualification and transition mechanisms to UCT-quality programs.

*International Monetary Fund*

### 12.      Staff is of the view that leaving a large number of countries without any EF borrowing

### 12.      Staff is of the view that leaving a large number of countries without any EF borrowing space in case of urgent BOP needs would not be appropriate in the current difficult economic context.

### Staff view and rationale
- Leaving many countries without any Emergency Financing (EF) borrowing space would be inappropriate given the current difficult economic context.
- Countries for which a UCT-quality program is not feasible would be exposed to risks, in particular PRGT-eligible countries given the relatively longer repayment period of RCF credit borrowed during the COVID-19 pandemic.
- Returning to pre-pandemic EF Cumulative Access Limits (CALs) that limit RCF access may reduce external financing available from other sources, given the catalytic role played by the Fund’s financial support.

### Staff’s proposal (summary)
- RFI:
  - Maintain the CAL at 150 percent of quota (and at 183.33 percent of quota for the LND window) until end-June 2024.
  - CAL would revert to the pre-pandemic level of 100 percent of quota (and 133.33 percent of quota for the LND window) on July 1, 2024.
- RCF:
  - Maintain the CAL at 150 percent of quota (and at 183.33 percent of quota for the LND window) until the date of the Board completion of the comprehensive review of PRGT facilities planned for 2024/25.
  - The 2024/25 comprehensive review of PRGT facilities is expected to assess key policies for concessional financing including access policy for the RCF.
- Presumed blenders (2:1 GRA:PRGT blending mix):
  - RFI portion of emergency financing would be subject to pre-pandemic CALs on July 1, 2024.
  - RCF portion would remain subject to temporarily higher CALs until the PRGT review in 2024/25.

### Emergency Financing access limits (current decision vs. staff proposal) — key numeric points
- RFI regular window:
  - Annual Access Limit: 50; remains 50 in all periods.
  - Cumulative Access Limit: current 150; existing Board decision 100; proposed 150 (7/1/2023-6/30/2024); proposed 100 (7/1/2024 and onwards).
- RFI LND window:
  - Annual Access Limit: 80 in all periods.
  - Cumulative Access Limit: current 183.33; existing 133.33; proposed 183.33 (7/1/2023-6/30/2024); proposed 133.33 (7/1/2024 and onwards).
- RCF regular window (PRGT-eligible):
  - Annual Access Limit: 50 in all periods.
  - Cumulative Access Limit: 100 in all periods (current and proposed as shown).
- RCF ES window:
  - Annual Access Limit: 50 in all periods.
  - Cumulative Access Limit: current 150; existing 100; proposed 150 (7/1/2023-PRGT review); proposed 100 (PRGT review and onwards).
- RCF LND window:
  - Annual Access Limit: 80 in all periods.
  - Cumulative Access Limit: current 183.33; existing 133.33; proposed 183.33 (7/1/2023-PRGT review); proposed 133.33 (PRGT review and onwards).
- Footnotes preserved:
  - 1/ Outstanding disbursements (purchases) from all other RCF (RFI) windows are included in the calculation of the annual and cumulative access.
  - 2/ Any RFI access also counts towards RCF limits.
  - 3/ For RCF ES and LND windows, the CAL would return to pre-pandemic levels on the date of completion of the comprehensive PRGT review.

### Expected effects on borrowing space
- The proposal would ensure most countries have at least 50 percent of quota in borrowing space under EF instruments over the coming years while pandemic-era outstanding EF balances are being repaid.
- Member countries that accessed financing under the RFI would in most cases maintain at least 50 percent of quota of borrowing space under the RFI, initially due to higher CALs and later reflecting gradual repurchases.
- PRGT-eligible members that accessed RCF financing would in most cases maintain at least 50 percent of quota in EF borrowing space over the next years due to the extension of higher CALs.
- Countries that accessed blended RFI-RCF financing would maintain at least 50 percent of quota in EF borrowing space until July 1, 2024, after which most would have borrowing space restored to 50 percent of quota due to repurchase of the RFI portion combined with continued higher RCF limits.

### Enterprise risks identified
- Types of enterprise risks from extending EF CAL:
  1. Financial risks to Fund credit and adequacy and liquidity of lending resources.
  2. Reputational credibility risk that extension could lead to more reliance on EF than UCT-quality programs.
  3. Human capital risks given staffing resource constraints for country teams and administering the policy.
- Assessment and mitigating points:
  - Financial risks from extending EF CAL are assessed as low/moderate under both GRA and PRGT lending.
  - Since April 2021, the Fund has provided financial assistance for most countries experiencing BOP needs through UCT-quality programs rather than EF.
  - EF constituted only 2.1 percent of total Fund financial assistance approved in FY2022.
  - Shortfalls in subsidy contributions, higher interest rates, and stronger demand for PRGT borrowing are straining PRGT finances; IMFC has supported reaching the 2021 funding targets and advancing work to put the PRGT on a sustainable footing.
  - Risk that countries would opt for EF instead of UCT-quality programs is assessed as low due to:
    - Rigorous application of qualification requirements for RCF and RFI.
    - Continued application of standard safeguards, including debt sustainability and adequate capacity to repay.
    - EF financing constrained by annual and cumulative access limits (hard caps).
    - RCF disbursements limited to two times in any 12-month period (except Food Shock Window).
    - Prior actions and policy commitments remain applicable to EF requests.
  - Human capital risk judged low/moderate and addressed by resource reallocation and project prioritization.
- Risks from not extending the CAL:
  - Multi-dimensional and could outweigh risks from extension.
  - April 2023 World Economic Outlook: growth forecast for 2023 is anemic with downside risks.
  - High risks of climate-related shocks, including El Nino in 2023, warrant adequate EF borrowing space where UCT-quality programs may not be feasible or necessary.
  - Leaving many qualifying countries without EF access could increase enterprise risk in terms of member engagement and potential reputational risks if some face severe exogenous shocks.

### Resource implications
- Proposed strategy is not expected to have significant resource implications.
- At the December 2021 review, temporary extension of higher CALs was assessed to have limited impact on GRA and PRGT resources; this assessment has not changed significantly.
- Use of RFI has been very limited since April 2021.
- Further temporary extension of higher CALs for the RCF is not expected to have an additional significant effect on demand for PRGT resources and on PRGT subsidy needs beyond baseline projections presented to the Board on April 6, 2023.
- Assumes EF would only be available for qualifying countries for whom a UCT-quality program is either not feasible or not necessary.
- The lower AAL (50 percent of quota for the RCF ES window and RFI regular window, and 80 percent of quota for the RCF and RFI LND window) in place since December 2021 limit potential resource implications.

### Issues for discussion (direct questions to Directors)
- Do Directors agree with extending temporarily higher CAL for RFI:
  - 150 percent of quota for the RFI regular window and 183.33 percent of quota for the RFI LND window until end-June 2024?
- Do Directors agree with extending temporarily higher CAL for RCF:
  - 150 percent of quota for the RCF ES window and 183.33 percent of quota for the RCF LND window until the 2024/25 comprehensive review of PRGT Facilities?

### Proposed Executive Board decisions (high-level)
- Decision I: Amend RFI Decision to extend references of the higher CAL period from “from April 6, 2020 to June 30, 2023” to “from April 6, 2020 to June 30, 2024” and related date adjustments from June 21, 2021 to June 30, 2024 in paragraph 5B.
- Decision II: Amend PRGT Instrument to change date references:
  - Revise “from June 21, 2021 to June 30, 2023” to “from June 21, 2021 to the date of the Executive Board decision completing the next Comprehensive Review of PRGT facilities in 2024/25.”
  - Revise “from April 6, 2020 to June 30, 2023” to “from April 6, 2020 to the date of the Executive Board decision completing the next Comprehensive Review of PRGT facilities in 2024/25 by the Executive Board.”

*Source: REVIEW OF THE CUMULATIVE ACCESS LIMITS UNDER THE RFI AND THE RCF (IMF staff text provided).*

---


_Source: https://www.imf.org/-/media/files/publications/pp/2023/english/ppea2023031.pdf_