## ppea2025010 ## Source details **Canonical URL:** [ppea2025010](https://www.imf.org/-/media/files/publications/pp/2025/english/ppea2025010.pdf) ## Other formats - [Markdown version](/-/media/files/publications/pp/2025/english/ppea2025010.pdf.md) - [Structured JSON version](/-/media/files/publications/pp/2025/english/ppea2025010.pdf.json) --- ### EXECUTIVE SUMMARY — Purpose, scope, and updates - Purpose: - Provides guidance to staff on the IMF’s facilities available to low-income countries (LICs), defined as all countries eligible to obtain concessional financing from the Fund under the PRGT. - Designed as a comprehensive reference tool for program work in LICs and summarizes relevant IMF-wide policies where applicable. - Emphasizes that IMF Executive Board decisions, including the terms of the various LIC Trust Instruments adopted by the Board, remain the primary legal authority. - Updates incorporated: - Updates the Handbook published in March 2023 by incorporating modifications resulting from the 2024 Review of the Poverty Reduction and Growth Trust (PRGT) Facilities and Financing and other recent Board papers. - Notes the last review of members’ eligibility for PRGT support concluded on October 15, 2024, and states that 70 IMF member countries are currently PRGT-eligible. - Production: - 2025 edition prepared by a team led by Mamadou Barry under the guidance of Bjoern Rother and Gaëlle Pierre; approved by Guillaume Chabert (SPR). ### PRGT role, architecture, and facilities - PRGT role and evolution: - The PRGT is the Fund’s main vehicle for providing concessional financing to eligible LICs; concessional lending alongside GRA lending has evolved since the mid-1970s. - 2010 architecture overhaul aimed to make Fund support to LICs more flexible and tailored. - PRGT facilities architecture (three concessional facilities): - Extended Credit Facility (ECF): main tool for medium-term support to LICs with protracted balance of payments problems. - Standby Credit Facility (SCF): financing to LICs with short-term balance of payments needs. - Rapid Credit Facility (RCF): rapid low-access financing with limited conditionality to meet urgent balance of payments needs. - Non-financing instruments and program preparatory tools: - Policy Coordination Instrument (PCI): available to all IMF members (including PRGT-eligible members) seeking cooperation without Fund financial resources; requires UCT-quality policy commitments. - Staff-Monitored Program (SMP): informal monitoring arrangement to build a track-record toward a UCT-quality program. - Program Monitoring with Board Involvement (PMBs): SMPs with limited Executive Board involvement. - Policy Support Instrument (PSI) eliminated in 2023; PCI shares many PSI features while offering more flexibility. ### 2024 Review of the PRGT Facilities and Financing — approved reforms and operational detail - Objectives: bolster capacity to support LICs, catalyze additional financing, and restore PRGT self-sustainability. - Approved policy reforms included: - a long-term self-sustained annual lending envelope of SDR 2.7 billion; - a new interest rate mechanism maintaining interest-free PRGT lending to the poorest LICs while charging positive concessional interest rates to others; - maintaining PRGT normal annual and cumulative access limits of 200 and 600 percent of quota, respectively (temporarily approved in December 2023), but reverting the access norm to 145 percent of quota to anchor future demand; - strengthening and streamlining PRGT safeguards. - Additional targeted reforms: - extension until end-2025 of temporarily higher RCF access limits; - alignment of the PS-HCC debt sustainability requirement to that of GRA EA for LICs meeting the GRA-EA market access criterion; - reinstatement of assessment of absence of Serious Short-Term Vulnerabilities for graduation from PRGT eligibility; - updates of the PRGT-eligibility list per criteria. - Addressing PRGT subsidy resource gap: - further five-year suspension of the reimbursement of PRGT administrative expenses to the GRA; - framework to distribute GRA net income and/or reserves to members to facilitate generation of PRGT subsidy resources. - Operational note: - Triggers and thresholds expressed as a percentage of quota will be automatically adjusted down when the general effectiveness conditions for the 16th General Review of Quotas (GRQ) increase have been met. ### Objectives of PRGT facilities and target macroeconomic position - All PRGT facilities aim to assist LICs in achieving, maintaining, restoring, or making progress toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - Characteristics of such a position: - Absence of a present or prospective balance of payments need. - Sustainable fiscal and current account balances; limited debt vulnerabilities; adequate international reserves; sufficient policy and institutional capacity. - May still involve significant donor assistance, with expected decline in aid dependence over time. ### Choosing instruments — main factors and rules of thumb - Three main factors determine choice: - expected duration to establish a stable macroeconomic position; - conditionality standard (UCT-quality standard); - nature of the balance of payments need (present, prospective, potential; and urgency). - Duration thresholds (preserved exactly): - Protracted balance of payments problem: ≧ 3 years. - Short-term BoP needs for SCF: ≦ 2 years (in any case not > 3 years). - ECF typical duration: 3 to 5-year arrangement (a longer ECF up to five years may be appropriate). - SCF duration: 1 to 3-year duration; no SCF arrangements in place >3 years out of any 6-year period (excluding precautionary use). - RCF: one-off disbursements; no more than two disbursements in any 12-month period are permitted. - SMP duration normally: 6-18 months. - Facility selection rules of thumb: - Protracted problem → ECF (UCT-quality program required). - Short-term present need → SCF (UCT-quality program required) or RCF if urgent and UCT-quality not feasible. - Precautionary prospective/potential needs → SCF on a precautionary basis. - No financing needed or sought → PCI. ### Access norms, access limits, blending, and financing terms (key figures preserved) - Access norms (as of January 1, 2025): - access norm set at 145 percent of quota for a three-year ECF arrangement and an under eighteen-month SCF arrangement (100 percent of quota when 16th GRQ general effectiveness conditions met). - ECF prorated norm for longer arrangements; SCF prorated up to 193.3 percent of quota for a 24-month SCF. - RCF regular window annual access norm: 25 percent of quota (17.5 percent of quota when 16th GRQ general effectiveness conditions met). - No norms for RCF “exogenous shocks” and “large natural disaster” windows. - Access limits (global annual and cumulative across ECF, SCF, RCF): - Normal annual access limit: 200 percent of quota (135 percent of quota when 16th GRQ conditions met). - Normal cumulative access limit: 600 percent of quota (405 percent of quota when 16th GRQ conditions met), net of scheduled repayments. - Blending policy and presumed blenders: - Presumed blenders: PRGT-eligible countries meeting income criterion for blending and without debt vulnerabilities that limit market access. - Income criterion for blending: annual GNI per capita has exceeded the prevailing IDA operational cutoff by at least 5 percent for two consecutive years (with transitional rule for GDP rebasing between March 11, 2020 and April 30, 2025). - Debt vulnerability criterion: in debt distress, or high risk of debt distress plus limited past access to international financial markets or small/microstate status (population < 1.5 million; microstate < 200,000). - Market access test for limited past access: issued or guaranteed eligible external debt in at least three of the past five years in cumulative amount ≥ 50 percent of quota (35 percent when 16th GRQ conditions met). - Blending mix: 1:2 mix of PRGT to GRA resources (1 part PRGT : 2 parts GRA). - Presumed blenders access to PRGT only in 1:2 blend, capped by PRGT normal annual and cumulative limits and per-arrangement cap at access norm. - Interest rate mechanism (effective May 1, 2025 for new approvals): - Interest remains zero for PRGT arrangements and RCF disbursements approved up to April 30, 2025. - Differentiated interest rates by country tier (tier fixed at arrangement/RCF approval date): - Tier 1: interest on PRGT loans remains at 0 percent. - Tier 2A: interest set at 70 percent of the prevailing SDRi. - Tier 2B: interest set at 40 percent of the prevailing SDRi. - Interest paid by PRGT borrowers after the end of each IMF financial quarter. - Repayment terms preserved exactly: - RCF and ECF repayments: 10 equal semi-annual installments, subject to a 5 1/2-year grace period from date of first disbursement and 10-year final maturity. - SCF repayments: 9 equal semi-annual installments, subject to a four-year grace period from date of first disbursement and eight-year final maturity. - Availability fee: - 0.15 percent per annum levied on the undrawn portion under an SCF arrangement after each six-month period; reimbursed for drawn amounts. ### Strengthened Policy Safeguards (SPS) and PRGT Exceptional Access (key thresholds preserved) - SPS framework: - Consolidates Enhanced Safeguards (ES) and procedural High Access Procedures (HAP) into a single Strengthened Policy Safeguards (SPS) framework: SPS1, SPS2, SPS3. - SPS applies to new PRGT financing requests (new arrangement, emergency financing, or augmentation). - SPS triggers (flow and stock): - SPS1 flow trigger: proposed access exceeds 125 percent of access norm for that arrangement. - SPS2 flow trigger: proposed access exceeds 150 percent of access norm for that arrangement. - SPS1/SPS2 stock trigger: cumulative PRGT access (credit outstanding) exceeds 300 percent of quota (200 percent of quota when 16th GRQ conditions met) at any point during the lifetime of arrangement. - SPS3 triggered when member is assessed to be at high risk of, or in, overall debt distress. - De-minimis threshold: 25 percent of quota per financing request (15 percent when 16th GRQ conditions met) exempts low/moderate risk members from SPS. - SPS requirements (combinations of two or more of four requirements): - Requirement 1: granular discussion of composition and evolution of debt. - Requirement 2: enhanced Capacity to Repay (CtR) analysis informed by cross-country comparisons (CtR dashboard). - Requirement 3: discussion of explicit program objective to reduce debt vulnerabilities. - Requirement 4: early informal Board meeting. - Exceptional access criteria: - Available to PRGT-eligible countries facing exceptional BoP pressures that cannot be met within normal limits, with adequately contained public debt sustainability risks and a reasonably strong program prospect of success. - As of July 14, 2021, no longer hard limits on exceptional access for PRGT-eligible countries meeting criteria; procedural safeguards similar to SPS2 apply. - Example thresholds (preserved exactly): - SPS1 flow trigger: exceeds 125 percent of access norm. - SPS2 flow trigger: exceeds 150 percent of access norm. - Stock trigger: PRGT credit outstanding exceeds 300 percent of quota (200 percent when 16th GRQ conditions met). - De-minimis threshold: 25 percent of quota (15 percent when 16th GRQ conditions met). - For a 42-month ECF example: SPS1 triggered above 211 percent of quota; SPS2 triggered above 254 percent of quota. - For a 12-month SCF example: SPS1 triggered above 121 percent of quota; SPS2 triggered above 145 percent of quota. ### Early informal Board engagement (Box 2) and informational requirements - Early informal Board meeting required under PRGT-EA and SPS2 as soon as management concurs that exceptional or high access could be appropriate. - Specific informational requirements for the informal meeting include: - factors underlying the large/exceptional BoP need after accounting for donor financing; - brief summary of main policy measures and macro framework; - assessment of program strength (SPS2) and prospect of success (PRGT-EA); - capacity to repay analysis including CtR table; - impact on Fund concessional resources and preliminary DSA assessment with LIC DSF charts; - discussion of public debt data quality and timetable for discussions. ### Extended Credit Facility (ECF) — objectives, duration, conditionality, safeguards - ECF objectives: - Medium- and longer-term concessional financing for PRGT-eligible members with protracted BoP problems to make significant progress toward a stable macroeconomic position. - Qualification: - Protracted BoP problem exists when resolution of imbalances is expected to extend over normally three years or more. - Minimum ECF length: three years; initial term normally three to five years. - ECF not intended for precautionary use; low-access ECF appropriate for minimal present/prospective needs but medium/longer-term adjustment needs. - If UCT-quality program infeasible, build track record via SMP and, if urgent, RCF. - Duration, extensions, cancellations: - ECF arrangements initial term three to five years; overall five-year limit on total duration of any ECF arrangement. - Extensions allowed (including multiple times) subject to five-year total duration cap; automatic termination if no program review completed over an 18-month period. - Concurrent use and blending: - ECF cannot be used concurrently with SCF or PCI; RCF cannot be obtained if an ECF arrangement is in place and on track (with narrow exceptions). - ECF can be blended with GRA resources (normally with EFF); blended modalities include single set of program conditions and coordinated phasing. - Conditionality and program design: - ECF-supported programs must meet UCT-quality standard; conditionality includes quantitative periodic and continuous PCs, structural benchmarks, and prior actions where necessary. - Social and other priority spending should be safeguarded and monitored (indicative floor where possible). - Safeguards: - Aim to complete safeguards assessment prior to Board approval but no later than first review. - Fiscal safeguards review required before first program review where exceptional access is requested or when at least 25 percent of funds directed to budget financing at approval. - Debt Sustainability Analysis (DSA): - ECF-supported programs underpinned by thorough DSA; joint preparation with World Bank; full DSA generally produced at least once every calendar year. - Financing assurances, arrears, and remedial measures: - ECF arrangements approved only when program is fully financed; firm commitments for official financing needed for next 12 months and “good prospects” beyond. - Fund arrears policies (NTP, LIOA, LIA) apply; disbursements suspended if member in arrears to the Fund. ### Standby Credit Facility (SCF) — duration, access, blending, and modalities - SCF duration: - Minimum: 12 months; Maximum: 36 months from Board decision. - Use limited to three years out of any six-year period (rolling basis) with specified exclusions for precautionary treatment. - Concurrent use and blending: - SCF cannot be used concurrently with ECF; SCF can run concurrently with a PCI. - SCF blended with GRA/SBA typically under a single program with coordinated conditions; phasing differences may require waivers of applicability for GRA component. - Access determination and norms: - Determination case-by-case based on balance of payments needs, program strength/CtR, and outstanding Fund credit. - Access norm for 18-month SCF set equal to that of 3-year ECF at 145 percent of quota; prorated up to 193.33 percent of quota for 24-month SCF (133.33 percent when 16th GRQ conditions met). - Financing terms: - SCF repayments: 9 equal semiannual installments, four-year grace period, eight-year final maturity. - Interest: assessed and paid quarterly beginning May 1, 2025; Tiered interest: Tier 1 = 0 percent; Tier2A = 70 percent of SDRi; Tier2B = 40 percent of SDRi. - Availability fee: 0.15 percent per annum on undrawn portion after each six-month period; reimbursed if amounts drawn. - Financing assurances, DSAs, PRGS: - SCF arrangements approved only when program fully financed; DSAs and PRGS requirements apply for arrangements exceeding two years. ### Rapid Credit Facility (RCF) — objectives, windows, access limits, and safeguards - RCF objectives: - Rapid outright concessional disbursements for LICs facing urgent BoP needs from exogenous shocks, natural disasters, conflict emergence, domestic instability, or fragility. - Appropriate where UCT-quality multiyear program not necessary or feasible. - Windows: - Regular window; - Exogenous shock window; - Large natural disaster window (damages ≥ 20 percent of GDP); - Temporary food shock window (Sep 30, 2022 to end-March 2024) — historical. - Repeated use limits: - No more than two RCF disbursements in any 12-month period. - More than one disbursement in any three-year period only if (i) need caused primarily by sudden exogenous shock (qualifying windows) or (ii) member has track record of adequate macro policies for at least six months prior to request. - Access limits and RCF sub-ceilings (preserved exactly): - PRGT global normal limits: annual 200 percent of quota (135 percent when 16th GRQ conditions met); cumulative 600 percent of quota (405 percent when 16th GRQ conditions met). - RCF regular window sub-ceilings: - annual (over any 12-month period): 50 percent of quota (35 percent when 16th GRQ conditions met); - cumulative: 100 percent of quota (70 percent when 16th GRQ conditions met); - per disbursement limit: 25 percent of quota (17.5 percent when 16th GRQ conditions met). - Exogenous shock window sub-ceiling: 50 percent of quota per year; cumulative normal 100 percent of quota; Covid-19 temporary cumulative increase: 150 percent of quota (applicable until end-December 2025). - Large natural disasters window annual access: up to 80 percent of quota per year; cumulative increased on account of Covid-19: up to 183.33 percent of quota (applicable until end-December 2025). - Conditions and blending: - Exogenous shock and large natural disaster windows require that primary cause is sudden exogenous shock (not donor withdrawal) and that policies are sufficiently strong. - Blending with GRA (RFI) possible; RFI purchases after July 1, 2015 count toward RCF sub-ceilings. - Safeguards assessment: - Request for RCF requires commitment to undergo safeguards assessment and provision of central bank external audit reports at time of formal request. - Safeguards assessment timing determined case-by-case; presumed completed before Board approval of subsequent arrangement applying Fund safeguards policy. - Financing terms: - RCF repayments: 10 equal semiannual installments, 5.5-year grace period, 10-year final maturity. - Interest: assessed and paid quarterly beginning May 1, 2025; Tiered interest as per PRGT reform (Tier 1 = 0 percent; Tier2A = 70 percent of SDRi; Tier2B = 40 percent of SDRi). - Arrears policies and exceptional cases: - Arrears to IFIs and bilateral creditors governed by NTP or LIOA as appropriate; in certain immediate post-disaster/conflict emergencies, RCF may be provided despite arrears in narrow circumstances with good-faith commitments. - LIA applies to private creditor arrears; in narrow emergency cases RCF may proceed despite private arrears with expectation of advancing normalization. ### Debt Sustainability Analysis (DSA), LIC-DSF, and Capacity to Repay (CtR) - DSA requirements: - New DSA required to accompany policy notes and staff reports for Article IV consultations and any request for IMF financing (new arrangement, emergency financing, or augmentation). - Joint Bank-Fund DSAs required for all PRGT-eligible countries with access to IDA resources; full DSA generally produced at least once every calendar year. - LIC DSF analytical components: - forward-looking 20-year projection under baseline, alternatives, and stress tests; - explicit risk rating of external debt distress (low, moderate, high, in debt distress); - recommendations on borrowing/lending strategy and macro policies. - Enhanced CtR analysis required under SPS and certain high-access/exceptional access cases (CtR dashboard, cross-country comparisons). ### Conditionality, PCs, TMU, adjustors, and monitoring - Conditionality principles: - Conditions limited to macroeconomic variables and structural measures reasonably within authorities’ control and critical for program success. - ECF and SCF require UCT-quality programs; RCF does not require UCT-quality programs and relies on ex ante policy undertakings. - Performance Criteria (PCs) and TMU: - Precise definitions of PCs set out in Technical Memorandum of Understanding (TMU) attached to LOI; TMU must define indicators, coverage, valuation, adjustors, and data submission requirements. - Quantitative periodic conditionality normally set semi-annually; indicative targets quarterly; adjustors used sparingly and fully specified in TMU. - Adjustors: - Purpose: protect program from foreseeable shocks outside authorities’ control; automatic in nature; used only with PCs. - Design principles: simple, clearly defined, symmetric where appropriate, applied to ceilings/floors and documented in TMU. - Misreporting and noncomplying disbursements: - Definition and procedures set out for noncomplying disbursements; de minimis misreporting waiver rules preserved. ### Poverty Reduction Strategies (PRS/PRGS), HIPC, and social spending - PRGS requirements: - For ECF arrangements and SCF arrangements exceeding two years, second and subsequent reviews require a PRGS issued to the Executive Board and subject to staff analysis. - PRGS must normally be developed and publicly available within previous five years (but no more than six) covering period up to completion of relevant review. - PRGS accompanied by a cover letter from member to MD; Bank assessment letter requested and circulated. - Social and priority spending: - Should be safeguarded and, whenever appropriate, increased under PRGT-supported programs; monitored through indicative floors where feasible. - HIPC and MDRI: - HIPC process requires track record and PRS/PRGS as specified; decision and completion point requirements summarized (minimum track record for decision point: six months). - MDRI no longer active; MDRI Trusts liquidated in 2015. ### Documentation, review process, fast-track, and Board interaction - Documentation and review (Appendix IX): - Interdepartmental review process for Policy Notes (PN), Staff Reports, LOI/MEFP/TMU; SPR and area departments joint responsibility; LEG and FIN involved; other functional departments review-on-demand. - PN content, PCM timeline, management clearance, and LOI/MEFP requirements outlined. - Fast-track procedures: - Fast-track not available for UFR/RSF/PCI/PMB/SMP requests; can be considered for UFR reviews or RFI/RCF requests in specific circumstances. - Board engagement: - Early informal Board engagement required for SPS2 and PRGT exceptional access cases; enhanced Board oversight for high-access and exceptional access requests. - Staff reports must include capacity to repay bottom line assessment and CtR metrics where applicable. ### Historical evolution and key milestones (selected) - Base envelope and three-pillar strategy (2012): - base envelope initially SDR 1¼ billion; increased in 2024 to SDR 2.7 billion (annual lending capacity). - three-pillar strategy: base envelope, contingent measures, self-sustainability principle. - Selected milestones: - PRGT established effective January 7, 2010 (successor to PRGF-ESF). - 2015, 2019, 2021, 2023 and 2024 reviews introduced access and structural reforms. - 2024 Review approved self-sustained SDR 2.7 billion annual lending envelope and other reforms noted above. *Source: ppea2025010 - EXECUTIVE SUMMARY (2025 LIC FACILITIES HANDBOOK, April 11, 2025).* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Purpose and scope - Provides guidance to staff on the IMF’s facilities available to low-income countries (LICs), defined as all countries eligible to obtain concessional financing from the Fund under the PRGT. - Designed as a comprehensive reference tool for program work in LICs and summarizes relevant IMF-wide policies where applicable. - Emphasizes that IMF Executive Board decisions, including the terms of the various LIC Trust Instruments adopted by the Board, remain the primary legal authority on matters covered. ### Updates incorporated - Updates the previous Handbook published in March 2023 (IMF, 2023i) by incorporating modifications resulting from the 2024 Review of the Poverty Reduction and Growth Trust (PRGT) Facilities and Financing (IMF-2024e) and a number of other recent Board papers. - Notes the last review of members’ eligibility for PRGT support concluded on October 15, 2024, and states that 70 IMF member countries are currently PRGT-eligible. ### PRGT role and evolution - The Poverty Reduction and Growth Trust (PRGT) is the Fund’s main vehicle for providing concessional financing to eligible LICs; concessional lending alongside GRA lending has evolved since the mid-1970s. - The 2010 architecture overhaul (Board adoption in July 2009; PRGT effective January 7, 2010) aimed to make Fund support to LICs more flexible and tailored to diverse needs and heightened exposure to global volatility. ### PRGT facilities architecture (three concessional facilities) - The PRGT framework introduced in 2010 includes three concessional financing facilities aligned broadly with GRA instruments to facilitate blending: - Extended Credit Facility (ECF): main tool for providing medium-term support to LICs with protracted balance of payments problems. - Standby Credit Facility (SCF): provides financing to LICs with short-term balance of payments needs. - Rapid Credit Facility (RCF): provides rapid low-access financing with limited conditionality to meet urgent balance of payments needs. ### Access, financing choices, and guidance - PRGT-eligible members have the right to access concessional financing but may opt to use GRA resources; staff should continue to advise PRGT-eligible members to seek financing under the PRGT facilities up to any applicable access limits given the financial advantages of concessional financing. - For PRGT-eligible members with weak capacity to service non-concessional debt, GRA financing may not be suitable relative to PRGT concessional financing. - For LICs not eligible for exceptional access, if the balance of payments need exceeds PRGT normal access limits, or if a member prefers GRA resources, consideration of a GRA request would be based on GRA access policies including program strength, Capacity to Repay (CtR), and debt sustainability. ### Blending and related instruments - The PRGT architecture is broadly aligned with the GRA to make blending of concessional and non-concessional resources operationally more seamless where appropriate. - The Resilience and Sustainability Facility (RSF) under the Resilience and Sustainability Trust (RST) can be used alongside LIC instruments in certain circumstances to provide affordable, long-term financing tied to reform measures addressing longer-term challenges affecting prospective balance of payments stability. ### Non-financing instruments and program preparatory tools - Two non-financing instruments available: - Policy Coordination Instrument (PCI): available to all IMF members (including PRGT-eligible members) seeking cooperation where they do not need or are not seeking Fund financial resources at the time of approval; requires UCT-quality policy commitments and more intensive monitoring. - Staff-Monitored Program (SMP): informal monitoring arrangement for authorities to establish a track-record of policy implementation to pave the way for a UCT-quality program or repeat emergency assistance. - Program Monitoring with Board Involvement (PMBs), which are SMPs with limited Executive Board involvement, are also available in specific cases. - The Policy Support Instrument (PSI) was eliminated in 2023; the PCI shares many features with the PSI while offering more flexibility. ### Handbook production and administrative details - 2025 edition prepared by a team led by Mamadou Barry under the guidance of Bjoern Rother and Gaëlle Pierre, with contributions from SPR, FIN, and LEG teams and administrative assistance by Linda Bisman, Emelie Stewart, and Katarina Varga. - Approved by Guillaume Chabert (SPR). - Table of contents and appendices list chapters, boxes, and tables covering facilities architecture, individual facility chapters (ECF, SCF, RCF), appendices on historical evolution, conditionality, track records, HIPC and MDRI, poverty reduction objectives, eligibility, CCRT, access norms, and documentation/review processes. *Source: ppea2025010 - EXECUTIVE SUMMARY (2025 LIC FACILITIES HANDBOOK, April 11, 2025).* ### 5. All PRGT facilities aim to assist LICs in achieving, maintaining, restoring, or making ### 5. All PRGT facilities aim to assist LICs in achieving, maintaining, restoring, or making progress (as the case may be) toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth ### Objectives and characteristics of the target macroeconomic position - Aim: assist LICs to achieve, maintain, restore, or make progress toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - Characteristics of such a position: - Absence of a present or prospective balance of payments need. - Domestic and external stability necessary to support strong and durable poverty reduction and growth. - Typically associated with: - sustainable fiscal and current account balances, - limited debt vulnerabilities, - adequate international reserves, - sufficient policy and institutional capacity to implement appropriate macroeconomic policies. - May still involve significant levels of donor assistance, though aid dependence would be expected to decline over time. ### Historical reviews and key architectural elements - Successive reviews of LIC facilities have kept the architecture essentially intact while introducing reforms to: - improve flexibility and targeting of the facilities; - ensure access levels remain in line with the magnitude and nature of LICs’ evolving financing needs and the availability of PRGT resources. - Significant changes between 2012–17 included: - modifications to the Fund’s policy on Poverty Reduction Strategies (PRS), - changes to interest rate policies, - increase in PRGT access limits in 2015 (further revised in 2019, 2021 and 2024). ### 2012 three-pillar strategy to make the PRGT financially sustainable - Adopted by the Fund’s Executive Board in September 2012, consisting of: - (i) a base envelope (initially SDR 1¼ billion and increased in 2024 to SDR 2.7 billion in annual lending capacity); - (ii) contingent measures to be put in place if average financing needs exceed the base envelope by a substantial margin for an extended period; - (iii) a principle of self-sustainability under which future modifications to LIC facilities would be expected to ensure demand can be met with resources available under the first and second pillar under a plausible range of scenarios. - Examples of contingent measures (if self-sustaining capacity declines substantially below base envelope): - reaching additional understandings on bilateral fundraising efforts supported by a broad range of the membership, with contributions from traditional and non-traditional donors to the PRGT; - suspension for a limited period of time of the reimbursement of the General Resources Account (GRA) for PRGT administrative expenses; - modifications of access, blending, and interest rate and eligibility policies to reduce the need for subsidy resources. ### 2024 Review of the PRGT Facilities and Financing — approved reforms - Objectives: bolster the Fund's capacity to support LICs, catalyze additional financing, and restore PRGT self-sustainability. - Approved policy reforms included: - (i) a long-term self-sustained annual lending envelope of SDR 2.7 billion, more than twice the pre-C OVID-19 annual lending capacity; - (ii) a new interest rate mechanism that maintains interest-free PRGT lending to the poorest LICs while charging a positive, but still concessional, interest rate to others to account for increasing heterogeneity among LICs and further enhance targeting of scarce resources to the poorest; - (iii) maintaining the PRGT normal annual and cumulative access limits of 200 and 600 percent of quota, respectively, initially approved in December 2023 on a temporary basis, but reverting the access norm to 145 percent of quota to anchor future demand and provide flexibility in calibrating access for countries that may face higher needs in a shock-prone world; - (iv) strengthening and streamlining PRGT safeguards to help mitigate risks without overburdening the Fund's policy framework. - Operational detail: - Triggers and thresholds expressed as a percentage of quota will be automatically adjusted down when the general effectiveness conditions for the 16th General Review of Quotas (GRQ) increase have been met. - Additional targeted reforms introduced in the 2024 Review: - (i) extension until end-2025 of the temporarily higher RCF access limits; - (ii) alignment of the PS-HCC debt sustainability requirement to that of the GRA EA for LICs meeting the GRA-EA market access criterion; - (iii) reinstatement of the requirement to conduct an assessment of absence of Serious Short-Term Vulnerabilities in all cases for graduation from PRGT eligibility; - (iv) updates of the PRGT-eligibility list to reflect application of the eligibility criteria. - Addressing PRGT subsidy resource gap: - further five-year suspension of the reimbursement of PRGT administrative expenses to the GRA; - framework to distribute GRA net income and/or reserves to members to facilitate the generation of PRGT subsidy resources. ### Choosing the appropriate instrument or facility — main factors - Three main factors determine the choice of instrument: - (i) expected time needed to establish a stable and sustainable macroeconomic position (duration of adjustment and balance of payments needs); - (ii) conditionality standard of Fund support (UCT-quality standard); - (iii) nature of the balance of payments need (present, prospective, potential; and urgency). - Duration of adjustment and balance of payments needs: - Protracted balance of payments problem: resolution expected to extend over normally three years or more. - Short-term balance of payments need: resolution expected to extend over normally two years or less, and in any case not more than three years. - Borderline cases (more than two but less than three years) require judgment on the nature of the balance of payments need and choice of facility. - Conditionality standard: - UCT-quality standard: member’s policies designed to provide substantial justification that balance of payments problems are being addressed and adequate confidence to the Fund that improvements will allow repayment by the time repayments fall due. - Nature of balance of payments need: - Present: exists in the current period; may be urgent when not addressing it would result in immediate and severe economic disruption. - Prospective: expected/projected to arise in the future, including during program implementation. - Potential: may arise under an alternative, typically downside, macroeconomic scenario but is not expected based on baseline/program projections. - A protracted balance of payments problem may involve a combination of present, prospective, and potential needs. ### Rules of thumb for selecting PRGT facilities and other instruments - If a country faces a protracted balance of payments problem: - Supported under the ECF, but not under the SCF. - ECF appropriate for UCT-quality economic programs (3 years or more). - If unable to implement a UCT-quality program, can build a track record through an SMP and, if urgent financing needs exist, access the RCF (concurrent use with an SMP possible). - If a country has short-term (present) balance of payments needs but not a protracted problem: - Supported under the SCF, but not under the ECF, if a UCT-quality program can be implemented. - RCF can be used as an alternative if a UCT-quality program is not feasible and the need is urgent (e.g., transitory shock expected to be resolved within one year and no major policy adjustments necessary). - If not in a position to implement a UCT-quality program, an SMP can be used, and RCF can be accessed if urgent needs exist. - Countries with neither a protracted problem nor a present need but with prospective or potential needs: - SCF could be used on a precautionary basis, with disbursements possible if and when a present need arises. - If a country neither requires nor is seeking PRGT or GRA financing: - Could be supported under the PCI (non-financial instrument available to all members to promote close policy dialogue). - If short-term balance of payments needs arise during the PCI, the country can request SBA/SCF financing or, if urgent, RFI/RCF financing. - PCI can be used in conjunction with precautionary SBA/SCF support in periods of increased uncertainty or risk. - The PCI is a qualifying UCT-quality instrument for requesting an RSF arrangement. - SMP role: - Used to build or rebuild a track record toward a UCT-quality program. - UCT-quality is not required for an SMP. - Can be combined with RCF in cases of urgent financing needs while building a track record. ### Key numerical and policy thresholds and durations preserved from the source - Base envelope initially: SDR 1¼ billion. - Base envelope increased in 2024 to: SDR 2.7 billion (annual lending capacity). - Long-term self-sustained annual lending envelope approved in 2024: SDR 2.7 billion. - PRGT normal annual access limit: 200 percent of quota. - PRGT normal cumulative access limit: 600 percent of quota. - Reverted access norm to anchor future demand: 145 percent of quota. - Extension of temporarily higher RCF access limits: until end-2025. - Conditions for automatic downward adjustment of triggers and thresholds (share of quota) tied to the 16th GRQ effectiveness: - (i) members holding not less than 85 percent of total quotas as of November 7, 2023, have provided written consent to increases in their quotas; and - (ii) necessary consents from NAB participants for effectiveness of the rollback of NAB credit arrangements have been received. - Time horizons: - Protracted balance of payments problem: ≧ 3 years. - Short-term BoP needs for SCF: ≦ 2 years (in any case not > 3 years). - ECF typical duration: 3 to 5-year arrangement (a longer ECF up to five years may be appropriate). - SCF duration: 1 to 3-year duration; no SCF arrangements in place >3 years out of any 6-year period (excluding precautionary use). - RCF: one-off disbursements; no more than two disbursements in any 12-month period are permitted. - SMP duration normally: 6-18 months. - Access limits initially approved in December 2023 on a temporary basis: annual and cumulative access limits of 200 and 600 percent of quota, respectively. *International Monetary Fund — 2025 LIC FACILITIES HANDBOOK: FACILITIES ARCHITECTURE OVERVIEW* ### 12. Access norms are a distinctive feature of the PRGT, reflecting the necessity to use ### 12. Access norms, access limits, blending, and financing terms ### Access norms and access limits - Access norms are defined per arrangement and based on the type and length of the arrangement. - Starting January 1, 2025, the access norm is set at 145 percent of quota (100 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met) for: - a three-year ECF arrangement, and - an under eighteen-month SCF arrangement. - The access norm for ECF arrangements longer than 3 years would be prorated upwards to maintain the norm at 145/3 per year. - The access norm for longer SCF arrangements would be adjusted proportionally, up to a limit of 193.3 percent quota for SCF arrangements (the prorated norm of a 24-month SCF). - The norm for annual access under the RCF regular window is set at 25 percent of quota (17.5 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met). - There are no norms for access under the RCF “exogenous shocks” and “large natural disaster” windows. - Access norms are guidance, not floors, ceilings, or entitlements, and are particularly useful for protracted BoP problems. - Access limits (global annual and cumulative) apply across ECF, SCF, and RCF and include credit outstanding and disbursements: - Normal annual access limit: Unless qualified for exceptional access, annual access cannot exceed 200 percent of quota (135 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met) across all concessional facilities. - Annual access is measured on a backward- and forward-looking basis over any 12-month period (12 calendar months). - Calculation rules: - For current arrangements, availability dates under the latest phasing provision are used; past scheduled amounts are counted whether drawn or not. - For past (expired or canceled) arrangements, only actual disbursements are counted (availability date should be used where applicable). - For past RCF approvals, the date of approval of the outright loan disbursement is used irrespective of whether the approved amount was drawn or not. - Normal cumulative access limit: Unless qualified for exceptional access, cumulative access cannot exceed 600 percent of quota (405 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met), net of scheduled repayments. - Cumulative access is the sum of all disbursed and committed financing under the PRGT on a net basis and requires total outstanding Fund concessional credit not to exceed the stated limits at any point in time based on projected disbursements and repayments. - Exceptional access above normal limits is available only to the poorest LICs (i.e., those that do not meet the income criterion for blending). - All PRGT-eligible members can access concessional resources up to the normal access limits. ### Blending policy and presumed blenders - Presumption: better-off PRGT-eligible countries will receive PRGT-financing only in a blend with GRA resources (presumed blenders). - When financing is blended under a PRGT arrangement and a GRA arrangement, total cumulative access is determined based on standard criteria so that total access is comparable across country cases irrespective of whether assistance is blended or PRGT-only. - Blending presumptions and limitations: - Blending is presumed for PRGT-eligible countries that (i) meet the income criterion for blending and (ii) do not have debt vulnerabilities that limit market access. - Income criterion for blending: annual GNI per capita has exceeded the prevailing IDA operational cutoff by at least 5 percent for two consecutive years. - Transitional rule: if a member completes its GDP rebasing after March 11, 2020 and no later than April 30, 2025, the income criterion will be met when the member’s annual GNI per capita exceeds the prevailing IDA operational cutoff by at least 5 percent for two consecutive years following, and not including, 2025. - Having met the threshold, the country continues to meet it unless annual GNI per capita falls below 95 percent of the IDA operational cutoff. - Debt vulnerability criterion: a country is deemed to have debt vulnerabilities that limit market access if (i) assessed to be in debt distress; or (ii) assessed at high risk of debt distress and either (a) has had limited past access to international financial markets or (b) is a small state (population below 1.5 million) or microstate (population below 200,000). - Limited past access is defined by the market access test in Annex IX (met if the country has issued or guaranteed eligible external debt in at least three of the past five years in a cumulative amount equivalent to at least 50 percent of its quota (35 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met)). - Access rules by category: - PRGT-eligible countries that meet the income and market-ability requirements (presumed blenders) can access PRGT resources only in a blend with GRA resources. - PRGT-eligible countries that meet the income criterion for blending but have debt vulnerabilities are subject to hard caps set at the normal annual and cumulative access limits (not eligible for PRGT exceptional access). - PRGT-eligible countries that do not meet the income criterion for blending are not subject to a cap (eligible for PRGT exceptional access). - Blending mix and caps: - The blending rules stipulate a 1:2 mix of PRGT and GRA resources (1 part PRGT : 2 parts GRA). - Presumed blenders can access PRGT resources only in a 1:2 mix with GRA resources within PRGT access limits. - Overall access to PRGT financing for presumed blenders is hard capped at the normal annual and cumulative PRGT access limits and a per arrangement cap at the access norm; any access needs above these must be met from the GRA. - RCF sub-limits differ by window and constrain the RCF portion in blended RCF/RFI cases in addition to overall PRGT access policies. ### Interest rates, repayment, and availability fees - Interest rate mechanism: - From May 1, 2025, a new interest rate mechanism applies to all new PRGT arrangements (ECF and SCF) and emergency financing (RCF) approved on or after May 1, 2025. - The new mechanism maintains PRGT interest rates below the rate applicable to GRA financing and market rates. - Interest will remain zero for PRGT arrangements and RCF disbursements approved up to April 30, 2025 (including all future disbursements, even those resulting from augmentations or extensions). - Interest will be paid by PRGT borrowers after the end of each IMF financial quarter, aligned with PRGT lenders’ interest payment schedule and the GRA and SDR Department billing cycle. - Differentiated interest rate structure (based on SDRi and blending policy): - Country tiers determine applicable interest rates (tier is fixed at arrangement/RFC approval date for all disbursements under that arrangement): - Tier 1 (“the lowest income”): PRGT-eligible members that do not meet the income criterion for presumed blending — interest on PRGT loans remains at 0 percent. - Tier 2 (“the higher income”): PRGT-eligible members that meet the income criterion for blending — interest is a fraction of the SDRi depending on debt vulnerabilities and market access: - Tier 2A (“higher-income, presumed blenders”): For higher income PRGT-eligible members without elevated debt vulnerabilities that limit market access — interest rate on PRGT loans is set at 70 percent of the prevailing SDRi. - Tier 2B (“higher-income, non-presumed blenders”): For higher income PRGT-eligible members that face debt vulnerabilities that limit market access — interest rate on PRGT loans is set at 40 percent of the prevailing SDRi. - Repayment terms: - Repayments of RCF credit and ECF: made in 10 equal semi-annual installments, subject to a 5 1/2-year grace period from the date of the first disbursement and 10-year final maturity. - Repayments of SCF credit: made in 9 equal semi-annual installments, subject to a four-year grace period from the date of the first disbursement and eight-year final maturity. - Authorities may decide to make early repayments at any time. - Repayment terms for the GRA component of blended arrangements are those applicable to the relevant GRA instruments (SBA, EFF or RFI). - Availability fees: - A fee at 0.15 percent per annum is levied on the undrawn portion of the amount available for drawing after each six-month period under an SCF arrangement if no disbursement is requested. - If funds are drawn, the availability fee is reimbursed for the amounts drawn. ### Safeguards policy - The document proceeds to Section F on Safeguards Policy (content beyond this point not included in the supplied excerpt). *Source: ppea2025010* ### 22. The 2024 Review of the PRGT Facilities and Financing introduced a single framework— ### 22. The 2024 Review of the PRGT Facilities and Financing introduced a single framework— the “Strengthened Policy Safeguards (SPS)” ### Overview of the Strengthened Policy Safeguards (SPS) - The 2024 Review consolidated the Enhanced Safeguards for debt sustainability and capacity to repay the Fund (ES) and the procedural High Access Procedures (HAP) into a single framework called the Strengthened Policy Safeguards (SPS). - SPS applies to new PRGT financing requests—i.e., under a new arrangement, an emergency financing, or augmentation of access under an existing arrangement. - SPS includes three categories of scrutiny: SPS1, SPS2, and SPS3. Each category activates two or more of four SPS requirements (see Box 1a and Table 3). ### Triggers for SPS categories (flow and stock triggers) - SPS1 is triggered when: - (i) the proposed access under a new PRGT financing request would exceed 125 percent of access norm for that arrangement (“flow” trigger); or - (ii) the proposed access under the financing request, including augmentation, would cause the cumulative PRGT access (i.e., credit outstanding to the PRGT) to exceed 300 percent of quota (200 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met) at any point over the lifetime of the existing or proposed arrangement (“stock” trigger). - SPS2 is triggered when: - (i) the proposed access under a new PRGT financing request would exceed 150 percent of access norm for that arrangement (“flow” trigger); or - (ii) the proposed access under the financing request, including augmentation, would cause the cumulative PRGT access to exceed 300 percent of quota (200 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met) at any point over the lifetime of the existing or proposed arrangement (“stock” trigger). - SPS3 is triggered when a member is assessed to be at high risk of, or in, overall debt distress. - De-minimis threshold for SPS application: - If the access level of a new PRGT financing request is at, or below, 25 percent of quota (15 percent of quota when the general effectiveness conditions for the 16th GRQ increase becomes effective), a member at low or moderate risk of overall debt distress would not be subject to the SPS. - For members at high risk of, or in, overall debt distress, SPS3 would be triggered regardless of the requested level of access. ### SPS requirements (Box 1a) — combination of two or more of the four requirements - Requirement 1: A granular discussion of the composition and evolution of debt, with a particular focus on external debt that is more difficult to restructure. This should include: - i) the composition of external debt by main creditor category (multilateral, bilateral, private), domestic debt, and other debt, and - ii) de facto senior debt (debt to the IMF, the World Bank and other multilateral creditors) and known collateralized debt that may be more difficult to restructure. - Requirement 2: An enhanced CtR analysis informed by cross-country comparisons of metrics of Fund exposure (i.e., CtR dashboard). This should include the evolution of projected IMF debt and debt service relative to key economic metrics over the course of the repayment period as compared with other PRGT programs, supported by a set of standardized charts provided by the Finance Department. Where financing requests would result in comparatively elevated levels of key CtR indicators, staff should examine the severity of implied risks and explain how program design — including access, phasing, and conditionality — seeks to mitigate these risks. - Requirement 3: A discussion of the explicit program objective to reduce debt vulnerabilities. Reducing debt vulnerabilities would typically involve reducing breaches of thresholds for the four key indicators in the LIC-DSF over the program period under the baseline scenario. - Requirement 4: An early engagement with the Board through an informal Board meeting. The informal Board meeting allows teams to present to Executive Directors an initial assessment of the member’s BoP need, macroeconomic situation, potential fiscal and debt vulnerabilities, and information on the proposed program and related impact on concessional resources. The informal Board meeting should take place as soon as management determines that a new request involving exceptional or high access (that triggers SPS2) could be appropriate. - Presentation guidance: - The granular discussion of the composition and evolution of debt and the discussion of the explicit program objective to reduce debt vulnerabilities can be presented in a separate Annex (with a brief reference in the staff report discussion of program risks). - The enhanced CtR analysis should be included in the program modalities section of the policy note and staff report. ### Calculations of flow and stock triggers (Box 1b) - Flow trigger calculation changes: - The SPS flow trigger is based on the size of the arrangement, rather than total PRGT flows over a defined period, and is based on a multiple of the applicable access norm, rather than as a fixed percentage of quota. - Step 1: Calculate the applicable access norm. - As of January 1, 2025, the access norm is set at 145 percent of quota for a 3-year ECF and an 18-month SCF. This should be prorated for shorter or longer arrangements, following the formula set out in the examples. - Note that the maximum applicable access norm for an SCF is 193 percent of quota (equating to the pro-rated norm of a 24-month SCF)—this maximum norm applies to all SCF with a duration between 24 and 36 months. - Step 2: Compare the proposed access (for a new request or an existing arrangement plus augmentation) to the applicable norm and SPS1 and SPS2 triggers. - Example: if a 42-month ECF request or an augmentation within a 42-month ECF brings access under an arrangement above 211 percent of quota, SPS1 would be triggered. - Example: SPS2 would be triggered for a 12-month SCF with access/augmentation above 145 percent of quota. - Note: The ECF and SCF access norm will be reduced from 145 to 100 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met. - Stock trigger: - If the projected outstanding IMF credit exceeds 300 percent of quota (200 percent of quota after the general effectiveness conditions for the 16th GRQ increase have been met) upon approval or at any point in time over the lifetime of the existing or requested arrangement (including projected disbursements under the proposed RCF or the proposed arrangement/augmentation and repayments), SPS1 and SPS2 will be triggered. - Staff can assess whether the stock trigger is met by using the SPR Access Tool. - Notes on RCF and de-minimis: - Currently, the stock trigger would not apply to a request for financing under the RCF regular window since it is subject to a 25 percent of quota per disbursement access cap (17.5 percent of quota after the general effectiveness conditions for the 16th GRQ increase have been met), which is currently the de-minimis threshold that exempts a financing request from the application of SPS. - After the general conditions for effectiveness of the 16th GRQ increase become effective, new requests for financing under the RCF regular window could trigger SPS if the requested access is above the adjusted de-minimis threshold of 15 percent of quota. ### RCF specifics and other applicability points - An RCF request cannot trigger the SPS through the flow trigger because the RCF exogenous shock window and the large natural disasters window are not subject to access norms. - The RCF regular window is subject to a per disbursement access cap set at 25 percent of quota, which is the de-minimis threshold for the application of the SPS. An RCF request under the exogenous shock window or the large natural disasters window could trigger the SPS through the stock trigger. - The SPS requirements must be discussed in the policy note and staff report for new PRGT financing requests. They apply when a new arrangement or emergency financing is requested or at a program review for an existing arrangement where an augmentation is requested. - The SPS do not apply at program reviews that do not request an augmentation, and they do not apply to non-disbursing instruments. ### DSA and informational requirements - The Guidance Note on the Bank-Fund Debt Sustainability Framework for Low Income Countries (IMF, 2018b) discusses the criteria for DSA preparation. - A new DSA is required to accompany policy notes and staff reports for Article IV consultations and any request for IMF financing (i.e., under a new arrangement, an emergency financing, or augmentation of access under an existing arrangement), IMF-supported programs where there is a proposed modification related to, or a waiver for non-observance of, a performance criterion related to debt limits, and when there are significant changes in economic circumstances and borrowing assumptions. - The 2024 PRGT Review eliminated a specific DSA-update-related trigger that previously required a DSA update anytime access to PRGT resources in any 24-month period exceeded 80 percent of quota. ### Strengthened Executive Board oversight and informal Board engagement - The 2024 Review strengthened Executive Board oversight by requiring the inclusion of granular analysis of the composition and evolution of a country’s debt and an enhanced CtR analysis in the informational requirements for informal Board discussions when SPS2 is triggered. - Exceptional access and procedural safeguards involve early informal staff consultation with the Executive Board once management agrees that a new or augmented financing request involving exceptional access could be appropriate and before the negotiation mission. Staff should provide the Board with a short note in advance of the informal Board meeting including information on BoP needs, key measures under the program, debt sustainability and capacity to repay, impact on PRGT finances, and timeframe for program discussions. - Additional consultation with Executive Directors will normally be expected between the initial informal meeting and the Board's consideration of the staff report. Briefings should keep the Board abreast of program-financing parameters, including assumed rollover rates, economic developments, progress in negotiations, substantial changes in understandings, and any changes to the initially envisaged timetable for Board consultation. ### Exceptional Access: criteria and procedures - Exceptional access may be made available to PRGT-eligible countries that: - experience or have the potential to experience exceptional balance of payments pressures on the current account or capital account, resulting in a need for Fund financing that cannot be met within the normal limits; - where risks to the sustainability of public debt are adequately contained—i.e., a rigorous and systematic analysis indicates a high probability that the member’s public debt is sustainable in the medium term. This is generally considered met for countries assessed under the LIC-DSF as having low or moderate overall risk of public debt distress; or countries where the combination of the member’s policies and financing from sources other than the Fund, which may include debt restructuring, restores public debt sustainability with high probability, i.e., restores to a point where application of the LIC-DSF would yield the rating of low or moderate overall risk of public debt distress (a) within 36 months from Board approval of the financing request or within the period of a newly approved arrangement (whichever is longer) or (b) within the remaining period of an arrangement, in cases where the Board approves an augmentation or rephasing request; - that do not meet the income criterion for presumed blending when a new financing request (including augmentation/rephasing) is made; and - where the policy program of the member provides a reasonably strong prospect of success, including with respect to the member’s adjustment plans and its institutional and political capacity to deliver that adjustment. - As of July 14, 2021, there are no longer hard limits on exceptional access to PRGT resources for PRGT-eligible countries that meet the criteria above. Procedural safeguards, similar to those that apply when SPS2 is triggered, are applicable to exceptional access. - Staff reports should explicitly justify, as relevant, the member’s qualification for exceptional access at the time of program requests, augmentations, and in all subsequent reviews. ### Key numeric thresholds and figures (preserved exactly) - SPS1 flow trigger: exceeds 125 percent of access norm. - SPS2 flow trigger: exceeds 150 percent of access norm. - Stock trigger for SPS1 and SPS2: PRGT credit outstanding exceeds 300 percent of quota (200 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met). - De-minimis threshold: 25 percent of quota per financing request (15 percent of quota when the general effectiveness conditions for the 16th GRQ increase becomes effective). - As of January 1, 2025: access norm set at 145 percent of quota for a 3-year ECF and an 18-month SCF. - Example thresholds: - For a 42-month ECF example: SPS1 triggered above 211 percent of quota; SPS2 triggered above 254 percent of quota (based on the worked example). - For a 12-month SCF example: SPS1 triggered above 121 percent of quota; SPS2 triggered above 145 percent of quota (based on the worked example). - ECF and SCF access norm will be reduced from 145 to 100 percent of quota when the general effectiveness conditions for the 16th GRQ increase have been met. - RCF regular window per disbursement access cap: 25 percent of quota (17.5 percent of quota after the general effectiveness conditions for the 16th GRQ increase have been met); adjusted de-minimis threshold after effectiveness: 15 percent of quota. - Exceptional annual PRGT access for PRGT-EA: above PRGT normal annual access limit of 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - PRGT-EA cumulative access limit: 600 percent of quota (405 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - PS-HCC annual combined PRGT+GRA access trigger: above GRA annual access limit of 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - PS-HCC cumulative combined PRGT+GRA credit outstanding trigger: above GRA cumulative access limit 600 percent of quota (405 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - Time horizon for restoration of debt sustainability in exceptional access cases: within 36 months from Board approval of the financing request or within the period of a newly approved arrangement (whichever is longer), or within the remaining period of an arrangement in augmentation/rephasing cases. *Source: ppea2025010 - 22. The 2024 Review of the PRGT Facilities and Financing introduced a single framework— (extracted from the provided content).* ### Box 2. PRGT Exceptional Access and Strengthened Policy Safeguards Procedures for Early ### Box 2. PRGT Exceptional Access and Strengthened Policy Safeguards Procedures for Early Informal Board Engagement ### Purpose and timing of early informal Board engagement - Early engagement with the Board through an informal Board meeting is required under PRGT-EA and SPS2. - The informal Board meeting should take place as soon as management concurs that a new request involving exceptional or high access (SPS2 triggered) could be appropriate. - Objective: present an initial assessment of the member’s BoP need, macroeconomic situation, potential fiscal and debt vulnerabilities, and information on the proposed program and related impact on concessional resources. - To ensure Executive Directors’ views on access levels are appropriately reflected in the negotiations, the informal Board meeting should occur before negotiations progress. ### Specific informational requirements to be presented at the informal meeting - The factors underlying the large/exceptional BoP need, after accounting for financing from donors. - A brief summary of the main policy measures and macroeconomic framework. - For SPS2: the expected strength of the program. - For PRGT-EA: the assessment of a reasonably strong prospect of success, including the member’s adjustment plans and its institutional and political capacity to deliver that adjustment. - An assessment of capacity to repay the Fund including a capacity to repay table. - A reference to the impact on the Fund’s concessional resources. - An analysis of debt vulnerabilities, including a preliminary DSA assessment and the standard DSA charts; the discussion should include the results from the “realism” tools in the LIC DSF. - In SPS2 cases where a member is in high risk, or in, debt distress, the program must have an explicit objective to reduce debt vulnerabilities (as required under SPS). - A discussion of any deficiencies in the quality/transparency of public debt data. - The likely timetable for discussion with the authorities. - A Selected Economic Indicator (SEI) table. ### Optional analytical elements (EA cases, unless SPS1 or SPS2 triggered) - An enhanced CtR analysis informed by cross-country comparisons of metrics of Fund exposure. - A more granular discussion of the composition and evolution of debt, with a particular focus on external debt that is more difficult to restructure. ### Illustrative example (footnote text retained verbatim) - Example scenario where PRGT EA is triggered but SPS flow trigger is not: a country with no outstanding credit obtains a precautionary SCF for 18 months at 120 percent of its quota; at end of arrangement disburses entire amount; within less than 12 months requests a new 18-month SCF for 150 percent of quota with a frontloaded disbursement of 90 percent of quota at program approval. This new disbursement will cause the annual access limit (200 percent of quota) to be exceeded, thereby triggering the PRGT EA. However, since the access under the new arrangement is less than 125 percent of the norm (i.e., less than 181.25 percent of the quota), the SPS flow trigger will not be activated. Furthermore, with the cumulative access at the end of the new arrangement being 270 percent of the quota, which is less than 300 percent of the quota, the stock SPS trigger will not be activated either. *Source: ppea2025010 - Box 2. PRGT Exceptional Access and Strengthened Policy Safeguards Procedures for Early Informal Board Engagement* ### 193.33 percent of quota currently, and 133.33 percent of quota when the 16 ### CHAPTER II: EXTENDED CREDIT FACILITY ### A. Objectives and Qualification - Purpose and objective: - The ECF provides medium- and longer-term concessional financing to LICs with protracted balance of payments problems to assist PRGT-eligible member countries in implementing economic programs aimed at making significant progress toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - A stable and sustainable macroeconomic position is characterized by the absence of a present or prospective balance of payments need and by domestic and external stability necessary to support strong and durable poverty reduction and growth; typically associated with sustainable fiscal and current account balances, limited debt vulnerabilities, adequate international reserves, and sufficient policy and institutional capacity. - Use of the ECF is appropriate where resolution of entrenched macroeconomic imbalances is expected to extend over the medium or longer term and repeat use of the ECF has been common. - ECF disbursements can be used to strengthen international reserves and loosen financing constraints for public and private sectors; the ECF is also expected to catalyze additional donor financing. - Qualification: - Assistance under the ECF is available to all PRGT-eligible member countries that face a protracted balance of payments problem. - A protracted balance of payments problem exists when the resolution of macroeconomic imbalances needed to establish a stable and sustainable macroeconomic position is expected to extend over normally three years or more. - If a stable and sustainable macroeconomic position is expected within two years or less, but not exceeding three years, the SCF would be the appropriate instrument for UCT-quality programs; when expected in more than two but less than three years, choice between ECF and SCF is case-by-case. - Minimum length for an ECF arrangement is three years; use of the SCF is limited to three years out of any six-year period assessed on a rolling basis (except precautionary SCF arrangements). - The existence of a protracted balance of payments problem implies balance of payments needs are expected to arise over the course of the arrangement but may not be present at approval or individual disbursements. - The ECF is not intended for precautionary use (in contrast to the SCF); while members are not legally required to draw, members have routinely drawn available amounts. - A low-access ECF arrangement is appropriate for countries with minimal present/prospective balance of payments needs but medium- or longer-term adjustment needs (e.g., high debt burden or unsustainable current account deficit). - Qualification requires a Board finding that the member is making an effort to strengthen substantially and sustainably the balance of payments position, in the context of a UCT-quality program, and requires assurances of commitment and capacity to implement policies adequate to correct external imbalances and enable repayment within the specified maturity period. - Countries unable to meet ECF qualification requirements can build a track record through an SMP, the RCF (if urgent financing needs exist), or concurrent use of an SMP and RCF. ### B. Duration, Extensions, Cancellations, and Repeated Use - Initial term and normal practice: - Assistance under an ECF arrangement is available for an initial term of three to five years from the date of the Board decision approving the arrangement. - Normally, ECF arrangements would be expected to be approved for an initial three-year term. - An initial duration of up to five years may be considered where warranted (e.g., alignment with PRGS cycle, blending with EFF, or where longer-term structural reform efforts are critical). - The presumption remains that the length of an ECF arrangement would normally be three years; staff must justify longer terms. - Extensions and limits: - An ECF arrangement may be extended (including multiple times), subject to an overall five-year limit on the total duration of any ECF arrangement. - After expiration or cancellation, additional ECF arrangements may be approved if qualification criteria are met; there is no limit on the number of successor-ECF arrangements. - Extensions can allow for disbursement of rephased amounts or provide additional resources (augmentation) in light of projected developments in the balance of payments, subject to appropriate conditions. - Extensions are only possible if needed to allow disbursement of amounts under the arrangement; not possible when all scheduled amounts have already been disbursed. - Extensions must be requested by the member and approved by the Board before the arrangement’s expiration. - Types and approval of extensions: - Extensions involving rephasing and/or augmentations of access are normally approved by the Board based on a request in an LOI and in the context of a program review (completion of the review must demonstrate that the program is on track). - In exceptional circumstances (e.g., severe natural disaster preventing timely final review), extensions that involve rephasing may be approved outside the context of a scheduled program review if authorities and staff have documented understandings on appropriate policies; Board approval requires a staff report discussing the reasons and program status. - Short-term “technical” extensions (a few weeks or months) can be granted outside the context of a review when additional time is needed to complete final review(s) and make final disbursement available before expiration; such approvals typically use a short staff paper and lapse-of-time (LOT) Board approval. - Cancellation and automatic termination: - ECF arrangements may be cancelled by the authorities at any time (e.g., when macroeconomic imbalances have been resolved, when capacity or commitment to implement the program is lost, or when objectives/modalities of economic policies change substantially). - ECF arrangements will automatically terminate before their scheduled terms if no program review has been completed over an 18-month period. - The Board may, at the authorities’ request, delay termination for up to three additional months—provided this extension does not fall outside the existing arrangement period—if an understanding on targets and measures to put the program back on track appears imminent; arrangement automatically expires at the end of that extended period unless a program review is completed. ### C. Concurrent Use and Blending - Concurrent use: - The ECF cannot be used concurrently with the SCF or PCI; any pre-existing SCF arrangement or PCI must be cancelled before an ECF arrangement can be approved, and vice-versa. - A member cannot obtain RCF financing if an ECF arrangement is in place and on track. - RCF financing during an ECF arrangement can be provided only when: - (i) ECF disbursements are not possible (e.g., due to policy slippages or delays in program discussions), - (ii) qualification requirements for the RCF are met, including the existence of an urgent balance of payments need and relevant policy commitments, - (iii) the balance of payments need is primarily caused by a sudden exogenous shock. - Implementation of policy commitments made in the LOI for an RCF request could serve as a track record to bring an ECF-supported program back on track. - In the absence of an urgent financing need, a track record could be built through an SMP. - The ECF can be used concurrently with GRA financing under certain circumstances. - Blending: - When providing financial assistance with blended resources, ECF resources will normally be provided together with GRA resources under the EFF. - Concurrent financial assistance under an ECF arrangement and an SBA would only be expected where pre-existing ECF support is supplemented by SBA financing at a later stage (including where an ECF arrangement initially blended with EFF financing is extended beyond four years, as EFF arrangements are limited to a four-year period). - Financing through the RFI under the GRA during an ECF arrangement would be expected only if the ECF-supported program is off track, in which case RFI purchases would typically be combined with RCF disbursements. *Source: 2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY* ### 47. The modalities of blended financial assistance under ECF and EFF arrangements would ### 47. The modalities of blended financial assistance under ECF and EFF arrangements would ### Modalities of blended financial assistance (general) - Supports a three-to five-year economic program for countries with protracted balance of payments problems, based on a single set of program conditions, schedule of disbursements and reviews, and other requirements that largely mirror stand-alone ECF arrangements. - Key differences when blended: - Disbursements would involve both PRGT and GRA resources (see Section D on access under blended financial assistance), implying lower average concessionality of the Fund’s financial support than under a stand-alone ECF arrangement. - EFF qualification requirements must be met (e.g., a clearly articulated structural reform agenda). If access under the EFF were to be above GRA normal access limits, the member would also need to meet the GRA Exceptional Access criteria. - Disbursement timing and conditioning differences: - Each disbursement under an ECF arrangement is linked to a specific test date, whereas for EFF arrangements, purchases are conditioned upon observance of the Performance Criteria (PCs) related to the most recent test date (“controlling” PCs). - As a result: - Reviews under the EFF arrangement of the blended financial assistance may require waivers of applicability under certain circumstances (see Section H). - There could be situations where resources relating to the ECF component are disbursed based on an earlier test date, while resources relating to the EFF component are made available against a later test date. ### Determination of access — main criteria (paragraphs 48–50) - Area departments are encouraged to consult with SPR and FIN early (i.e., before a policy note (PN) is circulated for formal review). - Staff reports for new arrangements or requests for change in access should explicitly discuss the basis on which access was determined with reference to the main criteria and to access norms and limits. - Access is determined case-by-case based on: - (i) the member’s (present and prospective) balance of payments need (taking into account all projected balance of payments flows, including reserve accumulation and financing from other sources); - (ii) the strength of its program and capacity to repay the Fund (taking into account policy plans, adjustment effort, commitment to implement the program, institutional capacity, track record of policy implementation, and country circumstances such as vulnerabilities, imbalances, and debt sustainability); - (iii) the amount of outstanding Fund credit and the member’s record of past use. - All else being equal, higher access is generally associated with a stronger program, stronger track record, and stronger capacity to repay. - Access may generally not exceed the member’s present and prospective balance of payments needs during the program period, and would typically be less than total financing needs, noting ECF-supported programs are expected to catalyze financing from donors and creditors. - Unlike GRA financing (and the SCF and RCF financing), an ECF arrangement can be approved and individual disbursements can be made even in the absence of a present balance of payments need, provided the Executive Board finds the member is experiencing a protracted balance of payments problem at approval. ### Access norms (paragraphs 51–55) - Access norms apply to stand-alone ECF arrangements. - The access norm for a three-year ECF arrangement has been set at 145 percent of quota ( it will be reduced to 100 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - For ECF arrangements longer than 3 years, the access norm is scaled up proportionally to the length of the arrangement. - Access norms provide general guidance and do not represent ceilings, floors or entitlements; access can deviate from the norms if warranted by the standard criteria. - Access may be above the norm where balance of payments needs are noticeably larger (e.g., due to a large shock). - Access may be below the norm when balance of payments need is limited, policy capacity is constrained, or debt vulnerabilities are high. - Special case: members with a protracted balance of payments problem but minimal present or prospective balance of payments needs may be set at a standardized level of 10 percent of quota per arrangement. - This low level of access is appropriate even when potential balance of payments needs are considered substantial because the ECF arrangement can be quickly augmented once such potential needs materialize. - PRGT global access limits: - Total access to financing under the PRGT should normally not exceed 200 percent of quota per year across all concessional facilities (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increase have been met). - Total access to financing under the PRGT should normally not exceed 600 percent of quota cumulatively, net of scheduled repayments (405 percent of quota when the general conditions for effectiveness of the 16th GRQ have been met). - Exceptional access: in exceptional circumstances, access above the normal access limits can be made available to PRGT-eligible countries that meet the exceptional access criteria. ### Phasing of access (paragraphs 56–58) - Phasing of ECF access is determined at approval and must consider applicable annual access limits, but need not mirror the projected evolution of balance of payments needs. - Access should normally be phased smoothly over the program period but could be front-loaded or backloaded based on program strength, timing of key reforms, and/or time profile of balance of payments needs. - Significant front-loading has been applied in exceptional cases (e.g., repayment of emergency assistance to the Fund, arrangements following clearance of overdue obligations). - Standard presentation practice: scheduled IMF disbursements plus other exceptional financing items should not exceed the overall balance of payments deficit and the programmed level of reserve accumulation in any given period, so the balance of payments is fully financed at the time of ECF approval and completion of each review, while residual gaps may show in outer years. - PRGT instrument requires availability dates for disbursements to not be phased more than 6 months apart (rule does not apply to interval between approval and first review). Availability dates should normally be phased at regular intervals not more than six months apart, with flexibility (e.g., reviews may be spaced 4 rather than 6 months apart). ### Access under blended financial assistance (paragraphs 59) - When financing is blended under an ECF arrangement and an arrangement under the GRA for a presumed blender, the standard PRGT access norm does not apply; access under blended financial assistance is subject to specific rules. - Total access is determined based on the standard criteria, implying comparable total access across similar country cases irrespective of blended or PRGT-only resources. - Rules for presumed blenders: - Access to the concessional (ECF) component of blended financial assistance for presumed blenders is in a 1:2 ratio of PRGT to GRA resources, with access to the concessional component capped at the access norm per arrangement, and subject to the overall limits on access to the PRGT. Any additional needs are met through GRA financing. - At approval of a new ECF arrangement involving blended financial assistance from a GRA arrangement, each scheduled disbursement should generally involve both ECF and GRA resources. - For GRA resources, phasing and PCs would only apply to purchases above the first credit tranche. - While shares of ECF and GRA financing at each disbursement can be determined individually, the general principle is they would reflect the 1:2 blending mix ratio unless there is a reason to deviate. ### Augmentations and reductions of access (paragraphs 60–62) - Access can be augmented to meet larger balance of payments needs or support program strengthening (e.g., in response to shocks unless program is off track, in which case RCF financing may be appropriate). - Extensions of arrangement periods may justify augmentation if extension involves financing needs not originally included. - Augmentations based on strengthening of the program can occur if earlier constraints (e.g., high risk of debt distress) subside. - Under the Trade Integration Mechanism (TIM), augmented access not exceeding 10 percent of quota will be available to compensate balance of payments shortfalls arising from trade liberalization measures implemented by other countries. - Augmentation requests are treated in line with the blending status at original program approval; this applies even if blending status changes mid-arrangement. - Historical augmentation sizes: augmentations under PRGT-supported programs have been in the range of 15–60 percent of quota for arrangements approved from 2010-2024, with a few cases well above this range. - Determination of augmentation access is based on standard access criteria; staff reports should discuss basis and size of augmentation with reference to criteria and norms. - Augmentations can be requested outside scheduled reviews where the increase in balance of payments problems is acute: - If the scheduled review associated with the most recent availability date preceding the augmentation request has not been completed, an augmentation request cannot be approved at an ad hoc review. - Requests are expected to be supported by a short staff report and an LOI describing the nature and size of the problem, policies to address the balance of payments difficulties, and information relevant to program implementation; such requests typically follow soon after a completed review. - Augmentations approved in ad hoc reviews are available in a single disbursement following Board approval; there is no limit on the amount of such a disbursement subject to overall access limits and norms. - The amount of the disbursement is limited to what is immediately needed by the member; additional amounts can be considered at the next scheduled review. - The new disbursement is subject to observance of the continuous PCs under the arrangement (including accuracy of information on implementation and any prior actions), and any other Board-determined conditions; it is not subject to periodic PCs and other conditions linked to remaining disbursements. - The augmented access is available upon Executive Board approval at an ad hoc review, and the member may request to draw such disbursement at any time until the availability date of the next scheduled disbursement under the arrangement. - Augmentation requests at ad hoc reviews that do not exceed 15 percent of quota (10 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met) are eligible for approval on a LOT basis. - A scheduled review following an ad-hoc review to consider an augmentation request must undertake a comprehensive review of policies and cannot be completed on LOT basis. *Source: 2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY (excerpt).* ### 63. For augmentations of access under arrangements that are presumed to involve ### 63. For augmentations of access under arrangements that are presumed to involve ### Blended PRGT and GRA access: rules on augmentations - Total financing mix over the full course of the respective arrangement is guided by the specific rules on access under blended arrangements, including that total access (post-augmentation) to concessional financing would be one-third of total overall access to Fund resources, subject to a cap on the concessional component set at the access norm per arrangement. - For augmentations that result in combined access to PRGT and GRA resources above GRA access limits, the PS-HCC apply (see Chapter I, Section F). ### Reductions of access under ECF - Access under an ECF arrangement could in principle be reduced rather than augmented. - The Fund will not unilaterally reduce access because of developments in the member’s balance of payments, unless such developments are substantially more favorable than envisaged at the time of approval of the arrangement and the improvement for the member derives in particular from improvements in the external environment. ### Procedural safeguards on high-access requests — DSAs and informal Board meetings - Financing requests are subject to procedural safeguards applied uniformly across all concessional facilities to protect PRGT-eligible members’ debt sustainability and the Fund’s concessional resources. - The staff report for any arrangement request or augmentation should provide an up-to-date assessment of debt vulnerabilities, with explicit reference to the impact of new borrowing from all sources, including prospective IMF disbursements. - Requirements and triggers: - A new DSA is required for any financing request under the PRGT, and for IMF-supported programs that propose modifications to, or a waiver for non-observance of, a performance criterion related to debt limits, and where there are significant changes in economic circumstances and borrowing assumptions (IMF, 2018b). - For financing requests that: (i) involve exceptional access to PRGT; (ii) trigger SPS2; or (iii) involve a member country with a high risk of debt distress or in debt distress, a DSA is required to support the access level. - The SPS1 and SPS3 (derived from the enhanced safeguards (ES) introduced in 2021) require greater scrutiny of debt and capacity to repay (CtR) risks in requests for new PRGT arrangements or augmentations where access is above certain thresholds or debt vulnerabilities are high. - An early informal Board meeting is required if a financing request (augmentation or a new arrangement) involves (i) exceptional access or (ii) triggers SPS2. - Staff would provide early notice to the Board (for instance in an informal country matters session) of upcoming arrangement requests or augmentations where the envisaged financing commitment, in absolute terms, would have a large impact on the Fund’s overall concessional resources. - Exception: the requirement for an informal Board meeting in SPS2 cases does not apply to new financing requests less than 25 percent of quota (15 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met). - Requests resulting in combined PRGT and GRA access in excess of the GRA normal access limits are subject to the PS-HCC. - The PS-HCC comprise criteria and procedural requirements and apply at the financing request and at subsequent reviews in the context of the arrangement. - The criteria are substantively the same as those of the PRGT exceptional access framework, except PS-HCC do not include an income threshold for application. - Procedural requirements are similar to PRGT and GRA exceptional access procedures. ### Financing terms (ECF) - Repayments: - Repayments of ECF credit are made in 10 equal semi-annual installments, subject to a 5 1/2-year grace period from the date of the first disbursement and 10-year final maturity. - The authorities may decide to make early repayments at any time but would not be expected to do so. - Interest: - Interest will be assessed and paid quarterly, beginning on May 1, 2025. - Applicable interest rates determined based on the country’s tier status at the time of the Board approval of a new ECF arrangement (see Chapter I section E). - ECF credit will remain interest-free for the poorest PRGT-eligible members (Tier 1). - Other PRGT-eligible countries subject to interest rates: - 70 percent of the prevailing SDRi for the presumed blenders (Tier2A). - 40 percent of the prevailing SDRi for the non-presumed blenders (Tier2B). - These interest rates will apply to all outstanding credit under new PRGT arrangements (including under the ECF) approved on or after May 1, 2025. ### Financing assurances - ECF arrangements can only be approved (and reviews completed) when the program is fully financed: staff must judge that donors and creditors (official and private) will provide necessary support to meet program financing requirements on terms consistent with the member’s return to external viability. - Assumptions regarding private sector financing do not need to be supported by assurances but must reflect reasonable expectations based on evolving conditions. - For the official sector, staff need to confirm that “firm commitments” are in place over the next 12 months (or the remaining program period if less than 12 months) immediately following the approval of the arrangement and the completion of each review, and there are “good prospects” that financing will be adequate for the remaining program period beyond the upcoming 12 months. - Post-program period: staff must assess that the member has capacity to repay the Fund based on medium-term balance of payments projections, and, for new arrangements or augmentations, the standardized table on indicators of capacity to repay the Fund as well as an enhanced CtR analysis informed by cross-country comparisons of metrics of Fund exposure whenever applicable. - Staff must assess whether the member’s prospective policies deliver projected post-program macroeconomic performance that adequately safeguards repayments to the Fund consistent with a sustainable debt path. ### Arrears policies and treatment - The Fund has three arrears policies: - (i) Non-Toleration Policy (NTP) - (ii) Lending Into Official Arrears (LIOA) — usually applies to claims held by official creditors - (iii) Lending Into Arrears (LIA) — usually applies to claims held by private creditors - International Financial Institutions (IFIs): - Determination of whether NTP or LIOA applies depends on whether official sector involvement (“OSI”) is required and the nature of the institution and its treatment by other creditors in restructuring (determined on the basis of five criteria). - If NTP applies, a credible plan for arrears clearance is required unless it is the World Bank which requires an agreed plan. - Country teams should seek guidance from LEG and SPR on application of arrears policies for specific IFIs. - Macroeconomic program assumptions should be consistent with expected resolution of existing arrears to IFIs. - Official bilateral creditors: - Two categories for treatment of direct bilateral claims: - If arrears arise in a program where economic parameters do not require restructuring and it is not covered by a past restructuring (non-OSI), NTP applies — in practice requires tacit approval of an official bilateral creditor’s Executive Director (i.e., non-objection at the Board meeting). - If arrears arise where restructuring of such claims is required under program parameters or covered by a past restructuring (OSI), the direct bilateral claim is subject to the LIOA policy — Fund may provide financing notwithstanding those arrears only under carefully circumscribed circumstances. - Country teams should seek guidance from LEG and SPR on categorization and application of LIOA. - While arrears are outstanding, the LIOA requires the financing assurances review to be completed at every program review. - Private creditors: - Arrears to private external creditors are covered by the LIA policy, applying to sovereign arrears to private external creditors and non-sovereign arrears arising from exchange controls. - Fund can lend in sovereign arrears to private external creditors only where: - (i) prompt Fund support is considered essential for successful implementation of the member’s adjustment program; and - (ii) the member is pursuing appropriate policies and making a good faith effort to reach a collaborative agreement with its private creditors. - In preemptive restructuring cases, the Fund may provide financing only if it has adequate assurances that such a restructuring will be successful — judged by a credible process for restructuring that will deliver sufficient creditor participation to restore debt sustainability and close financing gaps within program macroeconomic parameters, taking into account official sector commitments. - Consult SPR and LEG on determination of “credible process.” - Whenever arrears are outstanding to private creditors, approval of an arrangement and each Fund disbursement is subject to a financing assurances review in which the Board considers whether adequate safeguards remain in place for further use of the Fund’s resources and whether the member’s adjustment efforts are undermined by developments in creditor-debtor relations. - Domestic arrears: - ECF-supported programs should address domestic arrears as part of overall program design; specification of policies depends on country context, particularly the fiscal framework. - Overdue obligations to the Fund: - Where a member is in arrears to the Fund in the GRA, the Special Disbursement Account, the SDR Department, or to the Fund as Trustee (including the PRGT and RST), a request for IMF financing, including under the ECF, will not be approved and disbursements under an existing arrangement will be suspended until the arrears are cleared. - One month after a financial obligation has become overdue, the Managing Director (MD) will notify the Executive Board that an obligation is overdue. - A report by the MD to the Executive Board will be issued two months after a financial obligation has become overdue, and will be given substantive consideration by the Executive Board one month later; the report will request that the Executive Board limit the member’s use of Trust resources. - A factual statement noting the existence and amount of arrears outstanding for more than three months will be posted on the member’s country-specific page on the Fund’s external website. - Once the Executive Board adopts a decision to limit the member’s use of the Trust resources, a press release will be issued. - The MD may recommend advancing consideration of reports regarding overdue obligations or may recommend postponing for up to one-year periods the Executive Board’s consideration in exceptional circumstances where the MD judges there is no basis for an earlier evaluation of the member’s cooperation with the Fund. - While a member is in arrears to the Fund, policy support can only be provided through surveillance, technical assistance, and, under certain circumstances, SMPs. - Remedial measures for dealing with PRGT arrears include removal from the list of PRGT-eligible countries, declaration of noncooperation with the PRGT, and suspension of technical assistance. - Annual reports and financial statements will identify those members with overdue obligations to the Trust outstanding for more than six months. *2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY* ### 72. As a general principle, staff should aim to complete a safeguards assessment prior to ### ppea2025010 - 72. As a general principle, staff should aim to complete a safeguards assessment prior to ### Safeguards assessments: timing, scope, and reporting - Staff should aim to complete a safeguards assessment prior to Executive Board approval of a new ECF arrangement but no later than the first review under the arrangement. - Once the first review under the program has passed, subsequent staff reports should highlight the status of the assessment and, if not completed, reasons for its delay. - In general, safeguards assessments are conducted for each new arrangement; exceptions: - No update assessment required for successor arrangements where an assessment was completed no more than 18 months prior to the approval of the successor arrangement. - No update assessment required for central banks with a strong track record if a previous assessment was completed within four years and no substantial issues were identified in the prior assessment or subsequent monitoring. - Safeguards assessments relate to the borrowing members’ central banks; a separate fiscal safeguards review may be required in some cases involving budget financing. - Summary of safeguards issues: - A summary should be reflected in the main body of staff reports for as long as Fund credit remains outstanding. - Staff reports should discuss status of assessments, significant recommendations on legislative amendments, problems in obtaining access to data, and deviations from commitments relating to safeguards recommendations. - Safeguards assessment recommendations may be incorporated into conditionality or structural measures under the member’s program. - Process and coordination: - Safeguards assessments involve continuous analysis of documents and discussions with authorities and the central bank’s external auditors; evaluate governance, auditing, financial reporting, control systems, autonomy, mandate and legal framework over the life of an arrangement and for as long as Fund credit remains outstanding. - Close cooperation and coordination between FIN, other functional departments, and area departments is essential; FIN should be kept informed by area departments of safeguards issues, including logistical issues such as timing of new arrangements and reviews. - Monitoring procedures: - Monitoring procedures are streamlined to follow Post Financing Assessment (PFA) practices: once a member’s credit outstanding falls below the PFA threshold, monitoring intensity is limited to only a review of the annual external audit results, unless a country continues to be subject to PFA. ### Program objectives for ECF-supported arrangements - All ECF-supported programs aim to make significant progress toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - ECF-supported programs should aim to maintain or move toward: - strong and durable poverty reduction and growth, - low or moderate inflation, - sustainable fiscal and current account balances, - limited debt vulnerabilities, - adequate international reserves, - sufficient policy and institutional capacity to implement appropriate macroeconomic policies. - Program design should align with the country’s own poverty reduction and growth objectives and be clearly articulated in the LOI/MEFP and staff report at approval. ### Typical policy objectives to be included in LOI/MEFP and staff reports - Fiscal policies: - Fiscal stance well anchored to ensure macroeconomic stability and fiscal/debt sustainability. - Revenue and spending policies take due account of growth and social objectives. - Budgets guided by medium-term fiscal frameworks to the extent possible. - Monetary policies: - Consistent with inflation, exchange rate, and reserve objectives, while taking cyclical considerations into account. - Exchange rate policies: - Ensure a unified exchange rate and a real exchange rate level broadly in line with fundamentals. - Financial sector policies: - Geared toward financial stability and deepening to foster investment and forestall crises. - Public financial management reforms: - Ensure resources are tracked, reported, and targeted appropriately; public debt management to support debt sustainability; revenue reforms to broaden the revenue base and enhance tax efficiencies. - Other structural reforms critical for program macroeconomic objectives. ### Special considerations for fragile and conflict-affected states (FCS) - Design should use ECF flexibility to focus on critical near-term objectives while meeting UCT standards and ECF provisions. - At approval, the program should: - Describe broad objectives for the full program period supported by a medium-term macroeconomic framework and DSA. - Include a detailed statement of critical policies and measures for the first 12 months of the arrangement. - Structural reform agenda and related conditionality should reflect capacity constraints and prioritize immediate stabilization objectives. - Medium-term framework subject to higher uncertainty and may be adapted as circumstances evolve; policies after the first 12 months defined in future reviews. ### Role of ECF financial support - ECF balance of payments support assists countries in smoothing adjustment toward a more stable and sustainable macroeconomic position. - Fund financial support can: - Strengthen international reserves. - Provide liquidity for external payments. - Relax external financing constraints and loosen domestic liquidity constraints, reducing need for retrenchment in public and private savings-investment balances, enhancing policy options, and cushioning private sector adjustment. - Appropriate mix of financing and public/private adjustment determined on a case-by-case basis. - Consistent with Fund’s role in LICs, it can provide moderate liquidity support while bulk of financial assistance is normally expected from donors; Fund lending is expected to catalyze donor support. ### Budget financing, direct vs. indirect support, and fiscal safeguards review - A member may use the domestic counterpart of resources received under an ECF arrangement to finance, directly or indirectly, the budget deficit. - Direct budget support may be appropriate when: - The program envisages that the entire amount of Fund support is used to meet a present or prospective balance of payments need. - Loosening fiscal financing constraints is an important macroeconomic objective. - The central bank cannot or should not (for legal or institutional reasons) lend to the government while the domestic financial sector is too shallow or not stable enough to provide necessary budget financing (or the central bank plays a largely passive domestic policy role). - Staff reports should justify use of the domestic counterpart for budget financing where relevant and discuss safeguards implications. - Under safeguards policy, a fiscal safeguards review of the state treasury should in principle be conducted before the first program review for all arrangements where: - A member requests exceptional access to Fund resources, and - At program approval the member expects that at least 25 percent of the funds will be directed to financing the state budget. - This requirement also applies to HCC cases with at least 25 percent of resources directed to budget financing, and to cases where a member requests exceptional access through an augmentation during an arrangement, unless a fiscal safeguards review was completed within the previous 18 months. - Special notes: - Direct budget support refers to disbursements channeled through the country’s treasury at the request of the member. - Indirect budget support refers to disbursements made available to the member but channeled through the central bank, which help relax domestic financing constraints for the public sector. - A fiscal safeguards review will also be required when applicability criteria are met during an arrangement as a result of directing Fund resources to budget financing at subsequent reviews or member’s request for exceptional access; timing treated case-by-case. - An updated fiscal safeguards review is not required if one was completed not more than 18 months prior. ### Links to Poverty Reduction Strategies (PRS) and social spending - ECF-supported programs should be aligned with the country’s poverty reduction and growth objectives. - PRS/PRGS guidance: - Any financing request or program review under the ECF must be accompanied by a statement, normally in the LOI or MEFP, of how the program advances the country’s poverty reduction and growth objectives; where a relevant PRS exists, the LOI/MEFP description could cross-reference it. - The PRGS may be an existing national development plan or a newly prepared PRS document; a PRGS shall be accompanied by a cover letter from the member to the Managing Director and issued to the Executive Board. - A PRS issued to the Executive Board on or after May 24, 2019, shall be named a PRGS; a PRS issued as an EDD shall be deemed a PRGS. - The PRGS would need to meet minimum standards and countries encouraged to follow good practice guidelines. - Staff should inform authorities at an early stage about Definitions and Timelines for PRGS requirements to ensure adequate time for the PRS process. - While a PRGS is not required at initial Board consideration, the second (and every subsequent) review can be completed only if: - (i) the member has a PRS developed and made publicly available normally within the previous five years, but no more than six years, covering the period leading up to and covering the date of completion of the relevant review; and - (ii) the PRS has been issued to the Executive Board and has been the subject of staff analysis in the staff report on the request for an ECF arrangement or a review under an ECF arrangement. - In cases with limited institutional capacity for meeting PRGS requirements by the second review, a country may request Board approval of an extension of the deadline up to the fourth review; request must be made no later than time of the second review request. - A further extension up to the sixth review may be requested provided: - (i) adequate justifications based on persistent limited institutional capacity and other urgent priorities; and - (ii) the arrangement has a duration of at least four years, or an extension to at least four years is requested. - Any such request must be made no later than the time of the request for completion of the review corresponding to the extended deadline. - Staff views on the PRGS are provided in program documentation; staff reports should discuss how ECF policies contribute to the member’s PRGS. - A letter of assessment of the PRGS should be requested from the World Bank and circulated to the Board at the same time as the PRGS. - Staff report to the Board on PRGS implementation, including relevant developments; assessment done in the context of a PRGS Implementation Review (PIR). When PRGS requirements met by the second review, good practice is for PIR to take place by the fifth review. - In event of extensions of PRGS requirements, PIR is not an expected practice. - PRS implementation following launch would be tracked in the member’s LOI/MEFP. - Social and other priority spending: - Should be safeguarded and, whenever appropriate, increased under ECF-supported programs. - Monitored through explicit program targets, typically an indicative floor on social and other priority spending, whenever possible. - The member establishes the definition of social or other priority spending, in accordance with its poverty reduction and growth strategy. - If tracking such expenditures is not feasible, program documentation should report measures to develop an adequate tracking system; staff should monitor progress and the program may include structural benchmarks if appropriate. *Source: Excerpt from 2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY (selected pages).* ### 81. ECF-supported programs should be underpinned by a thorough DSA to inform the ### 81. ECF-supported programs should be underpinned by a thorough DSA to inform the ### Debt Sustainability Analysis (DSA) — scope and timing - ECF-supported programs should be underpinned by a thorough DSA to inform the elaboration of medium-term debt strategies and fiscal frameworks. - Country teams should engage with the authorities in the preparation of DSAs, discuss the results, and share the final files with the relevant officials. - DSAs for all LICs should be prepared jointly with the World Bank, and country teams should also involve other relevant Multilateral Development Banks (MDBs). - Joint DSAs are required for all PRGT-eligible countries that also have access to IDA resources. - A full DSA should generally be produced at least once every calendar year. - A new DSA should be produced for any new request for IMF financing (even when an annual DSA has already been completed). - For program countries, a new DSA is also needed where there is a proposed modification to a performance criterion related to debt limits, or request for a waiver for non-observance of a performance criterion related to debt limits, to assess the impact of the modification or waiver on debt sustainability. - A new DSA is also needed when the country experiences significant changes in economic circumstances and borrowing assumptions (including due to conflict and natural disasters). - DSAs for LICs should be presented as self-contained documents and should normally be prepared using the LIC Debt Sustainability Framework (DSF). ### LIC DSF analytical components - The LIC DSF analysis includes three components: - A forward-looking analysis (20-year projection) of debt and debt-service dynamics under a baseline scenario, alternative scenarios, and standardized stress tests; - An explicit rating of the risk of external debt distress (low, moderate, high, or in debt distress) based on indicative country-specific debt-burden thresholds that depend on the quality of policies and institutions in the country; and an assessment of the overall risk of debt distress; and - Recommendations on a borrowing (and lending) strategy and other crucial macro policies to limit the risk of debt distress, while maximizing the resource envelope to achieve the country’s development objectives. ### Collaboration with World Bank and development partners - Fund staff should consult closely with all major development partners active in the country when designing and monitoring an ECF-supported program. - The Joint Management Action Plan (JMAP) approved by the Boards of the World Bank and IMF calls on Bank and Fund country teams to consult with each other at least once a year to identify the country's key macroeconomic and structural reform challenges and coordinate work plans. ### Conditionality — principles - Conditionality is intended to ensure Fund resources assist members in resolving balance of payments problems consistent with the Fund’s Articles and establish adequate safeguards to Fund resources. - Conditions will normally consist of macroeconomic variables and structural measures reasonably within the member’s direct or indirect control and that are either: - of critical importance for achieving the goals of the program (or for monitoring program implementation); or - necessary for the implementation of specific provisions of the IMF Articles of Agreement or policies adopted under them. - Conditions outside the Fund’s core areas of expertise require a more detailed explanation of their critical importance. - ECF-supported programs must meet the UCT-quality standard, requiring commitment and capacity by the authorities to implement policies adequate to correct external imbalances and enable repayment to the Fund. - Given ECF’s medium- to longer-term focus, the ECF generally permits more flexibility than the SCF in the timing of measures; conditionality is limited to policies critical to the part of the adjustment covered by the arrangement. - For fragile and conflict-affected states, program design should use ECF flexibility to focus on critical near-term objectives while meeting UCT standards and ECF provisions. ### Specification of program conditions — forms and timing - Program conditionality will include quantitative periodic and continuous PCs (including standard continuous PCs), typically structural benchmarks, and prior actions if necessary. - Conditionality is set at approval and updated at program reviews; conditionality should normally be set (or modified) by the Board before the test date. - For post-dated PCs (test date already passed at Board consideration), program documents must be signed and circulated to the Board along with the staff report before the test date; no implementation information would be available at the Board meeting. - Prior actions: - Expected to be adopted prior to Fund approval of an ECF arrangement, completion of a review, or granting of a waiver with respect to a PC when critical for upfront implementation. - Set by management, applied parsimoniously, justified by criticality, specified in clear, objective, and unambiguous terms. - Should in principle be implemented at least five working days before the Board discussion. - Should be defined in the LOI/MEFP and cross-referenced in the relevant Board Decision; no “silent” or “hidden” prior actions. - Quantitative PCs timing and monitoring: - Would normally be set on a semi-annual basis and tied to semi-annual program reviews. - Indicative targets would normally be specified on a quarterly basis. - Quantitative PCs and reviews could be scheduled no more than six months apart; each scheduled review must be associated with a set of performance criteria and a disbursement. - Conditionality should cover the 12 months following the Board meeting (initial approval or review). - Under semi-annual monitoring, PCs would normally be established for two future test dates at approval and at each review (except penultimate and final reviews). - Under quarterly monitoring, PCs should normally be set for four future test dates, and in any case not less than for two future test dates. - If substantial uncertainty exists, the second set of PCs under semi-annual monitoring or the third and fourth set of PCs under quarterly monitoring could initially be established as indicative targets (ITs). - Indicative targets should extend through the end of the calendar year (or fiscal year) for which policies are being discussed. - Quantitative periodic PCs typically include measures of net international reserves, central bank domestic assets, domestic and fiscal balances or financing, and other macro-critical indicators. - Public debt conditionality would normally be required when a member faces significant debt vulnerabilities, or when there are merits to using debt limits instead of, or as a complement to, "above-the-line" fiscal conditionality. - PCs are usually subject to program adjustors reflecting deviations from projected external flows. - Indicative targets should include a floor on social and other priority spending where possible and may include other indicators such as reserve money and domestic revenue mobilization. - Continuous PCs always include commitments related to: - non-introduction or intensification of exchange restrictions and on non-introduction or modification of multiple currency practices; - concluding bilateral payment agreements that are inconsistent with Article VIII; - non-introduction or intensification of import restrictions for balance of payments reasons. - Continuous PCs are always included in the text of all Fund arrangements and, given their nonquantitative nature, are usually not listed in the PC table. - Other continuous PCs typically include the non-accumulation of external payments arrears. ### Structural benchmarks and program monitoring - ECF arrangements should include an agenda for macro-critical structural reforms, with appropriate flexibility on timing. - Structural benchmarks are critical measures intended as clear markers in assessing progress on critical structural reforms in program reviews. - Structural benchmarks should be used parsimoniously, with macro-criticality explicitly justified in program documents, ideally in the structural benchmark table. - Program Notes (PNs) for a new Fund arrangement request and at each review should indicate for each structural benchmark its depth and rationale in the table. - Reviews are the primary tool for monitoring structural elements, judging progress relative to objectives. - The program should: - identify overarching objectives of the structural reform agenda for the arrangement period as a whole; - define more specific objectives for periods covered by individual reviews; - set related structural benchmarks critical for achieving program objectives. - The appropriate number of structural benchmarks depends on country-specific factors, including centrality of structural reforms and country capacity. - The use of structural performance criteria was discontinued in 2009; under the ECF, structural benchmarks may be targeted for implementation either by a specific test date or by the time of a specific program review. - Failure to meet a structural benchmark does not automatically interrupt a disbursement; deviations indicate the program may be off-track and completion of the review requires a Board judgment that factors give confidence program objectives are being achieved. - Any unmet structural benchmark is deemed not met; the Board may establish it as a new benchmark with a new date and link it to the next program review if it remains critical for program success. - If implementation of a structural benchmark as defined is no longer possible, a new or modified benchmark may be proposed for Board establishment provided it is critical to program goals. ### Waivers and modifications of performance criteria (PCs) - A waiver for non-observance of a PC may be granted if the Fund is satisfied that the program will nevertheless be successfully implemented because of the minor or temporary nature of the non-observance or because of remedial actions taken by the authorities to preserve program objectives. - Upon verification that a PC was not met, a request for a waiver for its non-observance must be made by the member in the LOI. - If staff supports granting the waiver, relevant justification will be provided in the staff report, which will include a proposed decision on the waiver. - Waivers for non-observance are only required for quantitative PCs tied to the specific disbursement and to the review being completed (and for any standard continuous PC that has not been observed). - Waivers for PCs tied to subsequent disbursements and reviews are not required even if information on non-observance already exists; the staff report and LOI/MEFP must provide assurances that understandings on appropriate policies have been reached to complete the subsequent review, though PCs will need to be waived when that review is concluded. - Waivers of applicability could in principle be granted if information necessary to assess observance is unavailable and the Fund is satisfied the program will be successfully implemented and there is no clear evidence the PC has not been met; however, in the case of the ECF, waivers of applicability would be highly unusual. - Reviews under the ECF should generally be scheduled with sufficient time to monitor data relevant for applicable test dates; waivers of applicability raise serious questions about a country’s capacity to provide timely data. - In arrangements with blended financing, waivers of applicability would be required for the GRA-financed arrangement if the review is being conducted after the most recent test date has passed and data are not yet available. - With respect to the GRA financial arrangement, the member may purchase any amount available based on earlier completed reviews if the purchase is requested within 45 days of the most recent test date and all the conditions specified in paragraph 2 of the Reduction of Blackout Periods in GRA arrangements decision (Decision No. 14407-(09/105)) are met. *2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY* ### 97. Modifications to program conditionality that has already been set by the Board may be ### Modifications to program conditionality that has already been set by the Board may be ### Modifications to conditionality (paragraph 97) - Modifications to program conditionality set by the Board may be appropriate when departures from PCs are expected to occur, for instance when basic program assumptions have not been realized or significant developments have occurred that had not been anticipated when the PCs were set, provided that the targets remain macro-critical. - Requests for modifications: - Must be made by the authorities and supported by staff in the Staff Report submitted to the Board before the relevant test date has been passed. - Must be approved by the Board before information on the observance of the PC is available, normally in the context of a program review. - In exceptional cases, modifications can be approved by the Board outside the context of a program review, provided the authorities and staff have common understandings on appropriate policies through the next review, as documented in a revised or new LOI with an updated PC table and, where relevant, an updated TMU. - Appropriate circumstances for out-of-review modifications: - Original targets are no longer appropriate due to developments beyond the authorities’ control (including staff errors). - Understandings on modifications have been reached but a Board date before the relevant test date is not available (e.g., delays in preparing other portions of the Staff Report, or due to a full Board calendar). - Board approval outside a review requires a staff report that discusses: - Reasons for the modification, including why it is proposed outside the review context. - The status of the program. - Relevant policy understandings. ### Misreporting and noncomplying disbursements (paragraphs 98–99) - Definition under the ECF arrangement: - A noncomplying disbursement occurs when (i) the Fund makes a disbursement on the basis of a finding that applicable conditions established for that disbursement (which include the accuracy of the information on PCs for which waivers have been requested) have been observed; and (ii) that finding later proves to be incorrect. - Procedure upon evidence of a noncomplying disbursement: - The MD shall inform the member promptly. - After consultation with the member, if the MD determines that the member did receive a noncomplying disbursement, the MD shall promptly notify the member and submit a report to the Executive Board with recommendations. - The Board may decide either (a) that the member shall be expected to repay the disbursed amount, or (b) that the non-observance will be waived. - Waiver conditions: - Waivers will normally be granted only when the deviation from the relevant PC or other condition was minor or temporary, or if the member had adopted additional measures appropriate to achieve the objectives supported by the relevant decision on the disbursement. - Transparency: - Relevant information on misreporting should be made public by including it in the documents to be published after the Board discussion, such as a press release containing the Chairman’s Statement or summing up, with prior Board review of the text for publication. - De minimis misreporting (paragraph 99): - When the Executive Board finds that the noncomplying disbursement has been made but the non-observance was de minimis (i.e., a deviation would be so small as to be trivial with no impact on the assessment of performance), a waiver for non-observance shall be granted by the Executive Board. - The discussion of de minimis misreporting will be included in a staff report on the member that deals with other issues but the discussion should be deleted if such a report is published. ### Purpose of program reviews (paragraph 100) - Reviews evaluate whether the program is on track to achieve its objectives based on: - Backward-looking assessment: performance against quantitative PCs, structural and quantitative benchmarks, and prior actions. - Forward-looking assessment: prospects for successful program implementation, including policy capacity and commitments. - Conditions for the second (and every subsequent) review to be completed: - (i) A PRS has been developed and made publicly available normally within the five previous years, but no more than six years, and covers the period leading up to and covering the date of the completion of the relevant review (see paragraph 77 for conditions under which an extension of the PRS deadline may be granted). - (ii) The PRS has been issued to the Executive Board as a PRGS that has been the subject of staff analysis in the staff report of a request for an ECF arrangement or a review under an ECF arrangement. - Final review considerations: - At the time of the consideration of the final review under an ECF arrangement, assuming the protracted balance of payments problem has been resolved and no further program support from the Fund is expected, the scope of the forward-looking assessment could be more limited than for previous reviews. ### Updating program design and conditionality (paragraph 101) - Reviews update program design by specifying forward-looking policies and conditionality. - Reviews are the main vehicle for potential modifications to program design, including changes in access, phasing, and conditionality. - At approval and for each review: - The authorities’ LOI presents or updates their policy program. - A staff report provides an overall assessment of performance and policy commitments. ### Timing of reviews, test dates, and disbursements (paragraphs 102–106) - Documentation and specification: - Timing of all reviews, test dates, and disbursements should be summarized in a staff report table at the time of approval of an ECF arrangement and updated at reviews. - The Arrangement text attached to the staff report for the initial ECF request specifies the test dates, reviews, availability dates, and disbursements for the first year of the arrangement. - The PC table attached to the LOI/MEFP should clearly identify PCs, indicative targets, and adjustors for at least a 12-month period from the Board date of the arrangement approval or review. - The structural benchmark table should cover measures over at least a 12-month period. - The arrangement text should specify all PCs and review/availability dates, normally over the next 12 months from the Board date of the arrangement approval/program review. - Disbursement sequencing: - The first disbursement is made available upon approval of the arrangement. - Subsequent disbursements are conditional on observance of the PCs and a program review that confirms satisfactory progress. - Scheduling guidance: - Disbursements and reviews under a standard three-year ECF arrangement are normally both semi-annual, implying typically seven scheduled disbursements and six reviews (and thus six test dates with PCs). - Reviews and availability dates should be scheduled no more than six months apart (however, the interval between arrangement approval and the first availability date could be longer than six months if needed). - Flexibility exists to deviate from six-monthly schedule (more frequent reviews) to align with national budget/reporting cycles or in cases of significant short-term volatility and/or uncertainty. - If the arrangement is approved well before the first test date (e.g., four months or earlier), there may be only six disbursements and five reviews. - Reviews and disbursements can be shifted in frequency during the course of an arrangement based on projected risk profile or country circumstances. - Test dates and availability dates (paragraph 104): - Test dates for PCs must be set so that all scheduled disbursements can take place before the end of the arrangement, taking into account reporting lags and preparation and circulation periods for staff reports. - Availability dates should be set so that all data needed to confirm observance of PCs at related test dates would have become available. - Availability dates are specified in the Arrangement text and summarized in the staff report table. - Reviews cannot be completed prior to the applicable availability date. ### Program period start and blackout policy (paragraphs 105–106) - Program period start: - The program period supported by an ECF arrangement would typically start somewhat before the Board approves the ECF arrangement, and three to six months before the first test date under semiannual monitoring. - The program period should normally not start more than three months prior to the Board meeting, and in any case not before authorities and staff have discussed program parameters. - Blackout periods: - Unlike SBAs or EFF Arrangements, ECF design avoids “blackout periods” because each disbursement is linked to the completion of a specific review and observance of periodic PCs. - A disbursement is not blocked when a new test date passes because such new test date applies to a future disbursement subject to completion of a future scheduled review. ### Addressing interruptions: track records, combined reviews, and rephasing (paragraphs 107–109) - Interruptions and appropriate responses: - Interruptions and delays in ECF-supported programs may occur; substantial policy slippages often warrant establishing a track record before completing the next review. - Track records can be: - Informal (time-bound policy actions and targets). - Monitored more formally under an SMP. - Established via RCF in case of urgent financing needs caused by an exogenous shock (assuming applicable policy commitments are in place). - Combining reviews (paragraph 108): - Two reviews can be combined when delays in implementation have occurred and performance can be assessed against two test dates linked to successive reviews. - Combining three or more reviews is very unusual because PCs are typically not defined for more than two future test dates under semiannual monitoring and the ECF arrangement is automatically terminated if no review is completed over an 18-month period. - Combining reviews is only possible if: - (i) The conditionality has been fully defined, including applicable PCs, and approved by the Board. - (ii) Data are available for measuring observance of conditionality for the reviews. - (iii) The dates specified as the earliest dates for conclusion of the reviews in the text of the arrangement have all passed. - Typical rationale for combining: - The program is on track with respect to the most recent review and sufficient corrective action has been taken to offset earlier non-observance. - Combining is inappropriate when slippages relative to the most recent review’s objectives and conditionality are significant; in such cases, authorities could request cancellation of the arrangement and seek support under a new instrument when appropriate. - Alternatively, if earlier slippages were broadly satisfactory or addressed and program objectives remain achievable with modifications, the past review could be completed while establishing a new future test date and conditionality, typically combined with rephasing of access. - Rephasing disbursements (paragraph 109): - Disbursements may be rephased to change amounts associated with specified reviews and/or change number or timing of disbursements and reviews. - Rephasing examples: - If delays occur, combining reviews and rephasing can be appropriate where program objectives remain achievable through corrective actions; access associated with specific review(s) may be spread across future reviews consistent with the arrangement period. - Rephasing may be combined with an extension of the arrangement when few reviews remain, to allow completion before expiry. - Short-term technical extensions (typically not more than three months) can be used when additional time is needed to complete final review(s) and make final disbursement available before arrangement expiration. - Constraints: - Access should never be rephased in a manner that would make it impossible for the member to get the full, undisbursed amount under the arrangement. - If delays are substantial and rephasing would compress a very large amount of access into a short period (even with a potential extension), it would normally be appropriate to let the current arrangement expire, or for the member to cancel it, and proceed to a new ECF arrangement, unless there has been a very sharp turnaround in performance. *2025 LIC FACILITIES HANDBOOK: EXTENDED CREDIT FACILITY — INTERNATIONAL MONETARY FUND* ### 110. A number of additional modalities and policy requirements apply to the ECF, ### 110. A number of additional modalities and policy requirements apply to the ECF, ### Ex Post Peer Reviewed Assessments (PRAs) - Ex Post Assessments (EPAs) discontinued and replaced by Ex Post Peer Reviewed Assessments (PRAs) as of July 2015. - Staff reports for new arrangement requests must contain a succinct, peer-reviewed assessment for countries with longer term program engagement (LTPE), defined as having in place a Fund-supported financial arrangement for at least seven of the past 10 years, and for whom a PRA has not been prepared in the past five years. - Access to resources under ECF arrangements counts toward the policy on LTPE. ### Post Financing Assessments (PFAs) - Outstanding ECF credit is subject to a PFA (formerly PPM). - Members with outstanding credit from the Fund in the GRA and/or PRGT and/or the RST exceeding 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met) or SDR 0.38 billion from the PRGT (and/or SDR 1.5 billion from the GRA and/or SDR 0.38 billion from the RST) after the expiry of their arrangements are expected, upon the recommendation of the MD, to engage with the Fund in a PFA of their economic developments and policies. - Normally, one stand-alone PFA paper is expected to be issued for Executive Board consideration within a twelve-month period. ### Article IV consultation cycle - The 24-month cycle for Article IV consultations applies to members with an ECF arrangement. - Article IV consultations with members that have an on-track ECF arrangement in place would be expected to be completed within 24 months after the completion of the previous Article IV consultation. - If a program review is not completed by the date for completion specified in the arrangement, the next Article IV consultation would be expected to be completed by the later of: - (i) six months after the scheduled review date; and - (ii) 12 months, plus a grace period of three months after the previous Article IV consultation, - unless the program review has been completed prior to the later of these two dates, in which case the 24-month cycle continues to apply. - A member that has completed an ECF arrangement by drawing all amounts may remain on the 24-month cycle if it does not meet any of the criteria in paragraph 2 of Decision No. 14747-(10/96): - (i) the member is of systemic or regional importance; - (ii) the member is perceived to be at risk because of policy imbalances or particular threats from exogenous developments, or is facing pressing policy issues of broad interest to the Fund membership; or - (iii) the member has outstanding Fund credit exceeding 150 percent of quota (100 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met). - At the time of the final review under the arrangement, staff should assess whether the consultation cycle should be shortened back to 12 months based on the criteria above; the staff report for the final review should seek the Board’s approval of such shortening. - Where the arrangement is cancelled by the member or expires with undrawn amounts, the member will remain on the existing cycle unless the Executive Board determines otherwise based on the above criteria. ### Exchange System obligations and Data Provision (Articles VIII and XIV; Article VIII, Section 5) - Requirements under Article VIII Sections 2, 3, and 4, and Article XIV are discussed in Article VIII Acceptance by IMF Members—Recent Trends and Implications for the Fund and the new policy on Multiple Currency Practices (MCPs), effective February 1, 2004. - A standard continuous PC applies, inter alia, to the non-introduction or intensification of exchange restrictions and to the non-introduction or modification of multiple currency practices. - Article VIII, Section 5 of the Fund’s Articles of Agreement does not apply to the provision of information that is required for the purposes of Fund financial assistance under the ECF. - PRGT resources are held in an administered account and the obligations of a member using such resources are not governed by the Fund’s Articles (Article V, Section 2(b)); obligations are governed exclusively by the terms of the PRGT Instrument, which are incorporated into the terms of each ECF arrangement. ### Heavily Indebted Poor Country (HIPC) - Performance under an ECF arrangement can count toward a track record of strong policy performance under Fund-supported programs required for the HIPC decision point and completion point. - Minimum required track record for the decision point: six months. - For the completion point: no minimum duration for the track record (except where Fund-supported programs have been off track for more than six months); assessment is based on performance on particular outcomes and met applicable requirements for completion point under the HIPC initiative. ### Side letters - Use of side letters in ECF arrangements has been extremely rare. - Side letters may be used when release of information on policy understandings at the time of a program request or review would cause adverse market reaction or undermine the authorities’ efforts to prepare the domestic groundwork for a measure. *Source: ppea2025010 - 110.* ### 117. Assistance under an SCF arrangement is available for a minimum of 12 months and a ### 117. Assistance under an SCF arrangement is available for a minimum of 12 months and a maximum of 36 months from the date of the Board decision approving the arrangement ### Duration, eligibility window, and treatment of precautionary arrangements - SCF arrangement duration: - Minimum: 12 months - Maximum: 36 months from the date of the Board decision approving the arrangement - Use limitation: SCF use is limited to three years out of any six-year period, assessed on a rolling basis. - Exclusions from the three-year limit: - Past SCF arrangements treated in their entirety as precautionary (i.e., not a single disbursement was made) - New SCF arrangements for which the Fund assesses that the member does not have an actual balance of payments need at the time of approval - Repeat use: In case of repeat use of the SCF (exceeding three years out of any six-year period), staff reports and LOIs must explicitly make the case that the member does not have a protracted balance of payments problem. ### Extensions, rephasing, and augmentations - Extensions: - SCF arrangements may be extended (including multiple times) subject to a 36-month maximum total duration. - Extensions must be requested by the member and approved by the Board before the expiration of the arrangement period. - Extensions are only possible if needed to allow for the disbursement of amounts under the arrangement; cannot extend when all scheduled amounts have already been disbursed. - Extensions are not automatic and are subject to appropriate conditions consistent with the terms of assistance under the SCF. - Rephasing and augmentation: - Extensions can allow disbursement of rephased amounts or provide additional resources (augmentation) in light of projected developments in the member’s balance of payments position. - Rephasing: when more time is needed to implement envisaged policies or reforms. - Augmentation: when the duration of balance of payments needs is longer than originally envisaged (e.g., due to a shock) or heightened risks warrant further precautionary support. - Extensions involving rephasing or augmentation may establish additional reviews (where amounts are rephased) and can be combined with augmentations if warranted. - Approval context: - Rephasing and/or augmentations would normally be approved by the Board on the basis of an LOI and in the context of a program review where the review demonstrates the program is on track. - In exceptional circumstances, rephasing may be approved outside a scheduled review if authorities and staff have documented understandings; Board approval would require a staff report explaining reasons, program status, and policy understandings. - Ad-hoc augmentations: special procedures apply (see Section D in source). ### Short-term (“technical”) extensions and automatic termination rule - Short-term extensions: - Where additional time is needed to complete final review(s) and make final disbursement before expiration, SCF arrangements can be extended for a short period (a few weeks or months). - These short-term extensions can be granted outside the context of a review if authorities and staff have (or are expected to reach) understandings on appropriate policies to complete the review. - Board approval of short-term extensions generally takes place in the context of a very short staff paper with a decision proposed for LOT Board approval; the staff paper should explain status of discussions and document preparation and relevant policy understandings. - Automatic termination for long undischarged review absence: - An SCF arrangement with an initial duration of more than 24 months or extended to more than 24 months will automatically terminate before its scheduled term if no program review has been completed over a period of eighteen months. - The Board may, at the authorities’ request, delay termination by up to three months where understandings on targets and measures appear imminent; the arrangement will automatically terminate at the end of the extended period unless a program review is completed within this period. - Cancellation: Authorities may cancel an SCF arrangement at any time (e.g., imbalances resolved, capacity/commitment lacking, objectives/modalities of economic policies changed substantially). ### Concurrent use and blending — overview and main modalities - Concurrent use restrictions: - The SCF cannot be used concurrently with the ECF; any pre-existing ECF must be cancelled before an SCF can be approved and vice-versa. - A member cannot obtain RCF financing (or start an SMP) if an SCF arrangement is in place and on track. - RCF during SCF: - RCF financing during an SCF arrangement can only be provided when: - (i) SCF disbursements are not possible (e.g., policy slippages or delays in program discussions); - (ii) qualification requirements for the RCF are met, including the existence of an urgent balance of payments need and relevant policy commitments; and - (iii) the balance of payments need is primarily caused by a sudden exogenous shock. - Policy commitments made under an RCF disbursement (such as an RCF concurrently with an SMP) could serve as track record to bring the SCF-supported program back on track. - PCI and SCF concurrent use: - SCF can be used flexibly in conjunction with a PCI; qualification for the SCF is presumed for countries with an on-track PCI that experience or may experience a balance of payments need (present, prospective, or potential). - An on-track PCI reduces the time normally required to design an SCF-supported program. - No need to cancel the PCI; an SCF can run concurrently with a PCI. - PCI off track: SCF approval would typically only occur when appropriate corrective actions have been taken. - Modalities when PCI and SCF run concurrently (hybrid engagement): - Choice of SCF duration depends on financing and adjustment needs, not necessarily tied to PCI period; concurrent SCF could be considered for BoP need spanning 6-12 months, though longer durations are not precluded. - Staff report requesting SCF must explain rationale for retaining the PCI and weigh benefits/limitations. - When concurrent SCF duration exceeds 12 months, subsequent PCI review staff reports must explain continued appropriateness of concurrent use. - Reviews under the SCF must coincide with the PCI’s fixed review schedule. - Requests from PCI users for an exceptional access financing arrangement are generally discouraged. - Countries meeting criteria that create a presumption for blending and that experience a BoP need during a PCI-supported program are expected to receive PRGT financial assistance only in combination with GRA financing (not exclusively from the PRGT). - Quantitative performance criteria (QPCs) under the SCF are established for the PCI test dates and apply to the same variables/measures as quantitative targets (QTs) under the PCI. - Structural benchmarks (SBs) under the SCF and reform targets (RTs) under the PCI are established for the same test dates and measures; prior actions (PAs) could also be established for the SCF. - If structural measures are tied to reviews rather than test dates, established PCI review dates must be used. - Inclusion of indicative targets under an SCF approved concurrently with the PCI is strongly discouraged. - Blending with GRA/SBA: - When providing blended financial assistance, SCF resources will normally be provided together with GRA resources under the SBA. - RFI purchases under the GRA during an SCF arrangement would be expected only if the SCF-supported program is off track, in which case RFI purchases would typically be blended with disbursements under the RCF. - Blended SCF+SBA arrangements: - Support up to three-year economic programs for countries with short-term BoP needs, based on a single set of program conditions, schedule of disbursements and reviews. - Differences relative to stand-alone SCF include: - Disbursements would involve both SCF and SBA resources, implying lower average concessionality of Fund support. - SBA qualification requirements must be met; if blended arrangement pushes access above GRA normal limits, Exceptional Access criteria must be met. - Each disbursement under an SCF arrangement is linked to a specific test date, whereas for GRA arrangements purchases are conditioned upon observance of PCs relating to the most recent test date (the “controlling” PCs), which can lead to: - Need for waivers of applicability for SBA component reviews in certain circumstances. - Situations where SCF component disburses on an earlier test date while SBA component disburses against a later test date. ### Access determination — main criteria and norms - Determination of access: case-by-case based on three standard criteria: - (i) the member’s (present, prospective, and potential) balance of payments needs (taking into account all projected balance of payments flows, including reserve accumulation and financing from other sources); - (ii) the strength of its program and capacity to repay the Fund (policy plans, adjustment effort, commitment to implement the program, institutional capacity, track record, vulnerabilities, imbalances, and debt sustainability); - (iii) the amount of outstanding Fund credit and the member’s record of past use. - Precautionary arrangements: baseline scenario should present no Fund financing; potential needs can be highlighted by discussing volatile external flows or alternative scenarios. - Limits on access: - Access may generally not exceed the member’s present, prospective, and potential balance of payments needs during the program period and would typically be less than total financing needs. - Each individual disbursement requires a representation by the member of the existence of a present balance of payments need; members normally make this representation in an LOI. - The Fund will not challenge this representation prior to disbursement but may impose a prepayment expectation and other remedial measures after disbursement if it determines the disbursement took place in the absence of a present need. - Access norms: - Access norms apply to SCF arrangements (not in cases of blended financial assistance). - Norm for an 18-month SCF arrangement is set equal to that of the 3-year ECF arrangement at 145 percent of quota (100 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met). - Norms vary proportionately with the length of the SCF arrangement, up to the amount associated with a 2-year SCF arrangement: - 193.33 percent of quota (133.33 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met). *2025 LIC FACILITIES HANDBOOK: STANDBY CREDIT FACILITY — INTERNATIONAL MONETARY FUND* ### 134. Access norms provide general guidance and do not represent ceilings, floors or ### Access norms provide general guidance and do not represent ceilings, floors or entitlements ### Access limits and overall guidance - Access norms provide general guidance and do not represent ceilings, floors or entitlements; access can deviate from the norms if warranted under the standard criteria for determining access. - Total access under all concessional facilities in the PRGT is subject to “global” annual and cumulative limits, including credit outstanding and disbursements under the ECF, SCF and RCF. - Normal PRGT access limits: - Annual: normally not to exceed 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met) per year across all concessional facilities. - Cumulative: normally not to exceed 600 percent of quota (405 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met) cumulatively, net of scheduled repayments. - Exceptional circumstances: access above normal limits can be made available to PRGT-eligible countries that meet the exceptional access criteria. ### Phasing of access and presentation of financing - Phasing of SCF access, determined at approval, should mirror projected balance of payments needs and must account for applicable annual access limits. - Front-loading (or back-loading) is permissible depending on program strength, timing of reforms, and time profile of balance of payments needs; significant frontloading may be appropriate in exceptional cases (e.g., repayment of emergency assistance or arrears clearance) or for precautionary SCF arrangements. - Standard presentation practice: in any given period, scheduled IMF disbursements plus other exceptional financing items should not exceed the overall balance of payments deficit (from “autonomous transactions”) and the programmed level of reserve accumulation, ensuring full near-term financing at approval and review completion while residual gaps may appear in outer years. - PRGT instrument phasing rule: availability dates for disbursements must not be phased more than six months apart, except the interval between approval and the first review may exceed six months; some flexibility exists (e.g., reviews may be spaced 4 rather than 6 months to align with budget cycles). ### Access under blended financial assistance - For presumed blenders, total access is determined by standard criteria so total access should be comparable across similar country cases regardless of blended or PRGT-only resources. - Specific rules for blending: - Concessional (SCF) component access for presumed blenders is in a 1:2 ratio of PRGT to GRA resources, with access to the concessional component capped at the access norm; additional needs must be met through GRA financing. - At approval of a new SCF arrangement involving blended GRA resources, each scheduled disbursement should generally involve both SCF and GRA resources; phasing and performance criteria in the GRA apply only to purchases above the first credit tranche. - General principle: SCF and GRA shares at each disbursement should reflect the 1:2 blending mix ratio unless there is a reason to deviate. - For augmentations to blended arrangements, post-augmentation total concessional financing should be one-third of total overall access with a cap at the access norm. ### Augmentations and reductions of access - Augmentations allowed to meet larger balance of payments needs or support program strengthening; augmentations are often appropriate in the context of shocks unless the program is off track (then RCF may be appropriate). - TIM provision: augmented access not exceeding 10 percent of quota is available under the TIM to compensate for balance of payments shortfalls from trade liberalization by other countries. - Augmentation determination is based on standard access criteria (balance of payments need, program strength); no strict norms for augmentation size. - Historical augmentation range under PRGT-supported programs for arrangements approved from 2010–2021: 15–60 percent of quota, with some cases well above this range. - Augmentation procedural points: - Normally approved at scheduled review; can be requested outside scheduled reviews when underlying problems are acute. - Augmentations outside scheduled reviews require Fund Trustee assessment that the program is on track; Board assesses observance of continuous performance criteria or justifying waivers, met prior actions (if applicable), and policy suitability. - Modalities for ad hoc augmentations: - Cannot approve an ad hoc augmentation if the scheduled review associated with the most recent availability date preceding the augmentation request has not been completed. - Requests expected to be supported by a short staff report and a Letter of Intent describing nature/size of the problem, policies, and implementation information. - Ad hoc augmentations available in a single disbursement following Board approval; no amount limit subject to overall access limits and norms, and augmentation may be supplemented by corresponding GRA augmentation. - Disbursement amount limited to what is immediately needed; additional amounts can be requested in later reviews. - New disbursement at ad hoc review is subject to observance of continuous PCs and accuracy of information on PCs and prior actions; not subject to periodic PCs linked to remaining disbursements. - Augmented access is available upon Board approval and may be drawn any time until the next scheduled disbursement availability date. - Augmentation requests at ad hoc reviews that do not exceed 15 percent of quota (10 percent of quota when the general conditions for effectiveness of the 16th GRQ increase are met) are eligible for approval on a LOT basis; the subsequent scheduled review cannot be completed on a LOT basis and must undertake a comprehensive policy assessment. - The Fund cannot unilaterally reduce access under the SCF; authorities could request reductions in special circumstances (e.g., marked and unexpected improvement in the balance of payments). - PRGT Instrument caveat: commitments and disbursements are subject to PRGT resource availability and could result in access reductions in specific circumstances (PRGT Instrument, Section II, paragraphs 2 (i) and (3)(a)). ### Procedural safeguards on high access requests—DSAs and informal Board meetings - Procedural safeguards apply uniformly across concessional facilities to protect PRGT members’ debt sustainability and the Fund’s concessional resources. - Staff report requirements: provide up-to-date assessment of debt vulnerabilities with explicit reference to impact of new borrowing from all sources, including prospective IMF disbursements. - DSA requirements: - A new DSA is required for any financing request under the PRGT; for IMF-supported program documents proposing modification/waiver of a performance criterion related to debt limits; and when significant changes in economic circumstances and borrowing assumptions occur. - A DSA is required to support the access level for financing requests that: (i) involve exceptional access to PRGT; (ii) trigger SPS2; or (iii) involve a member with a high risk of debt distress or in debt distress. - SPS and ES (introduced in 2021) call for greater scrutiny of debt and capacity to repay (CtR) risks in requests where access is above certain thresholds or debt vulnerabilities are high. - Early informal Board meeting required if a PRGT financing request (new or augmentation) involves (i) exceptional access or (ii) triggers SPS2; Box 2 specifies required information. - Early notice to the Board is expected for requests where envisaged financing commitment would have a large impact on the Fund’s overall concessional resources. - Exception: informal Board meeting requirement in SPS2 does not apply for new financing requests of less than 25 percent of quota (15 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met). ### High combined credit and PS-HCC - Requests resulting in combined PRGT and GRA access in excess of GRA access limits are subject to the PS-HCC. - PS-HCC: criteria and procedural requirements substantively the same as PRGT exceptional access framework but without an income threshold; procedural requirements similar to PRGT and GRA exceptional access procedures. ### Financing terms (repayments and interest) - Repayment schedule for SCF credit: - Repayments made in nine equal semiannual installments. - Subject to a four-year grace period from date of first disbursement. - Eight-year final maturity. - Authorities may make early repayments at any time but would not be expected to do so. - Interest: - Interest will be assessed and paid quarterly, beginning May 1, 2025. - Applicable interest rates determined based on country’s tier status at Board approval of a new SCF arrangement. - Under the new interest mechanism: - SCF credit will remain interest-free for the poorest PRGT-eligible members (Tier 1). - Other PRGT-eligible members subject to interest rates of 70 percent of the SDRi for presumed blenders (Tier 2A) and 40 percent of the SDRi for non-presumed blenders (Tier 2B). - These interest rates apply to all outstanding PRGT credit under arrangements (including SCF arrangements) approved on or after May 1, 2025. *Source: 2025 LIC FACILITIES HANDBOOK: STANDBY CREDIT FACILITY* ### 150. A small availability fee applies to the precautionary use of SCF financial resources. ### ppea2025010 - 150. A small availability fee applies to the precautionary use of SCF financial resources. ### Availability fee for precautionary use - A fee at 0.15 percent per annum is levied on the undrawn portion of the amount available for drawing after each six-month period under an SCF arrangement if no disbursement is requested. - If the funds are drawn, the availability fee is reimbursed for the amounts drawn. ### Financing assurances - SCF arrangements can only be approved (and reviews can only be completed) when the program is fully financed. - Staff must judge that donors and creditors (both official and private) will provide the necessary support (through new financing and/or refinancing) to meet the program financing requirements on terms consistent with the member’s return to external viability. - Assumptions regarding private sector financing do not need formal assurances but must reflect reasonable expectations. - For the official sector, staff needs to confirm that “firm commitments” are in place over the next 12 months (or the remaining period of the program if less than 12 months) immediately following approval and completion of each review. - Staff must judge there are “good prospects” that financing will be adequate for the remaining program period beyond the upcoming 12 months. - For post-program repayment capacity, staff must assess medium-term balance of payments projections and, for new arrangements or augmentations, the standardized table on indicators of the capacity to repay the Fund as well as an enhanced CtR analysis informed by cross-country comparisons of metrics of Fund exposure whenever applicable. - Staff must assess whether the member’s prospective policies deliver projected post-program macroeconomic performance that adequately safeguards repayments to the Fund consistent with a sustainable debt path. ### Arrears and safeguards - Refer to Section F of Chapter II for arrears and safeguards detailed rules (text points to the broader section). ### Program objectives (SCF-supported programs) - SCF-supported programs aim at achieving, maintaining, or restoring a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - Such programs involve addressing and typically aiming to resolve the country’s macroeconomic imbalances over the course of the arrangement. - Programs should aim to maintain or achieve: - (i) low or moderate inflation, - (ii) sustainable fiscal and current account balances, - (iii) limited debt vulnerabilities, - (iv) adequate international reserves, and - (v) sufficient policy and institutional capacity to implement appropriate macroeconomic policies, while creating the conditions for strong and durable poverty reduction and growth. ### Program design — typical policy objectives to be articulated in LOI/MEFP and staff report - Fiscal policies: - (i) fiscal stance well anchored to help ensure macroeconomic stability and fiscal/debt sustainability, - (ii) revenue and spending policies take due account of the country’s growth and social objectives, - (iii) budgets are guided by medium-term fiscal frameworks to the extent possible. - Monetary policies consistent with inflation, exchange rate, and international reserves objectives, while taking due account of cyclical considerations. - Exchange rate policies that ensure a unified exchange rate and a real exchange rate level broadly in line with fundamentals, ensuring a stable and sustainable external position consistent with adequate growth. - Financial sector policies geared toward financial stability and deepening to foster investment and forestall financial crises. - Public financial management reforms to ensure resources are tracked, reported, and targeted appropriately (including by providing adequate resources for social and other priority spending); public debt management supporting debt sustainability; revenue reforms aimed at broadening the revenue base and enhancing tax efficiencies. - Other structural reforms critical for achieving the program’s macroeconomic objectives. ### Role of SCF financial support - SCF balance of payments support assists countries in smoothing the adjustment process toward a stable and sustainable macroeconomic position. - Fund support can strengthen international reserves and provide liquidity for external payments. - By relaxing external financing constraints, SCF support loosens domestic liquidity constraints of public and private sectors, reducing the need for retrenchment in public and private savings-investment balances. - The appropriate mix of financing and public/private adjustment is determined case-by-case. ### Use of domestic counterpart and fiscal safeguards review - A member may use the domestic counterpart of SCF resources to finance, directly or indirectly, the budget deficit when consistent with resolving balance of payments problems under the program. - Direct budget support may be appropriate when: - (i) the program envisages the entire amount of the Fund’s financial support is used to meet a present or prospective balance of payments need, - (ii) loosening fiscal financing constraints is an important macroeconomic objective under the program, - (iii) the central bank cannot or should not lend to the government (e.g., legal/institutional reasons, very shallow or unstable domestic financial sector, currency board, or full dollarization). - Under the safeguards policy, a fiscal safeguards review of the state treasury must be conducted before the first program review for all arrangements where: - a member requests exceptional access to Fund resources, and - the member expects, at the time of program approval, that at least 25 percent of the funds will be directed to financing the state budget. - The 25 percent fiscal safeguards requirement also applies to HCC cases with at least 25 percent of resources directed to budget financing, and to cases where a member requests exceptional access through an augmentation during an arrangement, unless a fiscal safeguards review was completed within the previous 18 months. - An update fiscal safeguards review is not required if one was completed not more than 18 months prior. ### Links to Poverty Reduction Strategies (PRS) and social spending - SCF-supported programs should be aligned with the country’s poverty reduction and growth objectives. - Any financing request or program review under the SCF must be accompanied by a statement, normally in the LOI or MEFP, of how the program advances the country’s poverty reduction and growth objectives; cross-referencing an existing PRS document is acceptable when relevant. - PRS documents are not required for SCF arrangements with duration of two years or less. - For SCF arrangements with an initial duration exceeding two years, a PRS document is required; the PRGS is the PRS document meeting required standards. - A PRGS shall be accompanied by a cover letter from the member to the Managing Director and shall be issued to the Executive Board with the cover letter. - A PRS issued to the Executive Board on or after May 24, 2019, shall be named a PRGS; a PRS document issued as an EDD is deemed a PRGS. - For arrangements with initial duration exceeding two years: - a PRGS is not required at initial Board consideration, but the second (and every subsequent) review can be completed only if: - (i) the member has a PRS that has been developed and made publicly available normally within the previous five years, but no more than six years, and covers the period leading up to and covering the date of completion of the relevant review; and - (ii) the PRS has been issued to the Executive Board as a PRGS that has been the subject of staff analysis in the staff report for a request for or a review under an SCF arrangement. - Requests for extensions beyond the second review of the deadline to produce the PRGS will not be permitted under SCF arrangements. - Staff should provide views on the PRGS in program documentation and request a letter of assessment of the authorities’ PRGS from the World Bank; the letter is circulated to the Board with the PRGS. - Staff report to the Board on PRGS implementation, including a PRGS Implementation Review (PIR) by the time of the fifth review; PRGS implementation would be tracked in the member’s LOI/MEFP. - Social and other priority spending should be safeguarded and, whenever appropriate, increased under SCF-supported programs; monitoring typically via an indicative floor on social and other priority spending where possible. - When tracking of such expenditures is not feasible, program documentation should report measures envisaged to develop an adequate tracking system, and the program may include structural benchmarks to establish these systems. ### Debt Sustainability Analysis (DSA) - SCF-supported programs should be underpinned by a thorough DSA to inform medium-term debt strategies and fiscal frameworks. - Country teams should engage with authorities in DSA preparation, discuss results, and share final files with relevant officials. - DSAs for LICs (full DSAs and updates) should be prepared jointly with the World Bank; country teams should also involve other relevant MDBs. - Joint DSAs are required for PRGT-eligible countries that also have access to IDA resources. - A full DSA should generally be produced at least once every calendar year. - A new DSA should be produced for any new request for IMF financing (even when an annual DSA has already been completed). - For program countries, a new DSA is needed where there is a proposed modification to a performance criterion related to debt limits, or a request for a waiver for non-observance of a performance criterion related to debt limits, to assess the impact on debt sustainability. - A new DSA is also needed when the country experiences significant changes in economic circumstances and borrowing assumptions (including due to conflict and natural disasters). *Source: ppea2025010 - 150. A small availability fee applies to the precautionary use of SCF financial resources.* ### 162. DSAs for LICs should be presented as self-contained documents (see Appendix IX). ### 162. DSAs for LICs should be presented as self-contained documents (see Appendix IX). ### DSA for LICs — core components - DSAs for LICs should normally be prepared using the LIC DSF. - The LIC DSF analysis includes three components: - A forward-looking analysis (20-year projection) of debt and debt-service dynamics under a baseline scenario, alternative scenarios, and standardized stress tests; - An explicit rating of the risk of external debt distress (low, moderate, high, or in debt distress) based on indicative country-specific debt-burden thresholds that depend on the quality of policies and institutions in the country; and an assessment of the overall risk of debt distress; and - Recommendations on a borrowing (and lending) strategy and other crucial macro policies to limit the risk of debt distress, while maximizing the resource envelope to achieve the country’s development objectives. ### Collaboration with World Bank and other development partners - Fund staff should consult closely with all major development partners active in the country when designing and monitoring a SCF-supported program. - The JMAP approved by the Boards of the World Bank and IMF calls on Bank and Fund country teams to consult with each other at least once a year to identify the country's key macroeconomic and structural reform challenges and coordinate work plans in support of addressing these challenges (see Appendix IX). ### Conditionality — purpose and principles - Conditionality under an SCF arrangement is intended to ensure that Fund resources are provided in support of meeting the program’s objectives, with adequate safeguards to the Fund’s resources. - Consistent with the Fund’s Guidelines on Conditionality, conditions will normally: - Consist of macroeconomic variables and structural measures reasonably within the member’s direct or indirect control; and - Generally be either (i) of critical importance for achieving the goals of the program or for monitoring program implementation, or (ii) necessary for the implementation of specific provisions of the IMF Articles of Agreement or policies adopted under them. - In some cases, conditions may be outside the Fund’s core areas of expertise, in which case a more detailed explanation of their critical importance is required. - SCF-supported programs must meet the UCT-quality standard, requiring the commitment and capacity by the authorities to implement policies adequate to correct external imbalances and enable repayment to the Fund. - Conditionality should be limited to those policies that are critical to achieving the part of the overall adjustment process covered by the arrangement. ### Specification of program conditions - Program conditionality will include quantitative periodic and continuous PCs (including standard continuous PCs), typically structural benchmarks, and prior actions if necessary. - Conditionality is set at approval and updated at program reviews; conditionality should normally be set (or modified) by the Board before the test date. - For post-dated PCs (test date already passed at time of Board consideration), program documents must be signed and circulated to the Board along with the staff report before the test date. - Conditionality should normally cover the 12 months following the Board meeting (initial approval or review). - PCs would therefore normally be established for two future test dates at approval and at each review (except penultimate and final reviews) under semiannual monitoring. - Under quarterly monitoring, PCs should normally be set for four future test dates, and in any case not less than for two future test dates. - Indicative targets should extend through the end of the calendar year (or fiscal year) for which policies are being discussed. ### Prior actions - Prior actions are measures expected to be adopted prior to the Fund’s approval of an SCF arrangement, completion of a review, or the granting of a waiver with respect to a PC when critical for successful implementation. - Prior actions are set by management, applied parsimoniously, and specified in clear, objective, and unambiguous terms. - Prior actions should in principle be implemented at least five working days before the Board discussion. - Prior actions should be defined in the LOI/MEFP and cross-referenced in the relevant Board Decision; there should be no “silent” or “hidden” prior actions, and all prior actions should be transparently set out in the Staff Report. ### Quantitative periodic PCs and indicative targets - Quantitative PCs would normally be set on a semi-annual basis and tied to semi-annual program reviews; indicative targets would normally be specified on a quarterly basis. - Flexibility: quantitative PCs and reviews could be set flexibly provided availability dates for disbursements are no more than six months apart and each review is associated with a set of PCs and a disbursement. - Quantitative periodic PCs typically include measures of net international reserves, central bank domestic assets, domestic and fiscal balances or financing, and any other macro-critical indicators. - Public debt conditionality is normally required when a member faces significant debt vulnerabilities or when there are merits to using debt limits instead of, or as a complement to, "above-the-line" fiscal conditionality. - PCs are usually subject to program adjustors that reflect deviations from projected external flows. - Indicative targets should include a floor on social and other priority spending where possible, and may include other indicators such as reserve money. ### Continuous PCs - Continuous PCs always include commitments related to: - Non-introduction or intensification of certain exchange restrictions; - Non-introduction or modification of multiple currency practices; and - Concluding bilateral payment agreements that are inconsistent with Article VIII. - Continuous PCs are always included in the text of all Fund arrangements and, given their non-quantitative nature, are usually not listed in the PC table. - Other continuous PCs typically include the non-accumulation of external payments arrears. ### Structural benchmarks - SCF arrangements should cover structural reforms deemed critical for achieving a stable and sustainable macroeconomic position in the short term. - Structural benchmarks: - Are critical measures intended to serve as clear markers in assessing progress in implementing critical structural reforms in the context of a program review; - Should be used parsimoniously, with macro-criticality explicitly justified in program documents, ideally in the structural benchmark table; - Reviews are the primary tool for monitoring performance on structural elements. - Specific objectives should be defined for periods covered by individual reviews, with related structural benchmarks critical for achieving the program’s objectives. - The appropriate number of structural benchmarks depends on country-specific factors; SCF arrangements would typically contain less than five structural benchmarks per semiannual review. - The use of structural PCs was discontinued in 2009. - If a structural benchmark is not met by the test date, it will be deemed not met; the measure should be established by the Board as a new structural benchmark with a new date and linked to the next program review if it remains macro-critical. - If implementation of a benchmark is no longer possible as defined, a new or modified benchmark may be proposed to the Board if it is critical to achieve program goals. - Failure to meet a structural benchmark does not automatically interrupt a disbursement under an ECF arrangement; deviations serve as indicators that the program may be off-track and completion of the review requires a Board judgment that there are factors giving confidence that program objectives are being achieved. ### Waivers and modifications - A waiver for non-observance of a PC may be granted if the Fund is satisfied that the program will nevertheless be successfully implemented because of the minor or temporary nature of the non-observance or remedial actions taken by the authorities. - Upon verification that a PC was not met, a request for a waiver must be made by the member in the LOI; if staff supports the waiver, relevant justification is provided in the staff report along with a proposed decision. - Waivers for non-observance are required only for quantitative PCs tied to the specific disbursement and to the review being completed (and for any standard continuous PC that has been missed). - Waivers of applicability could in principle be granted if information necessary to assess observance of a PC is unavailable and the Fund is satisfied the program will be successfully implemented; however, waivers of applicability would be highly unusual for the SCF. - In blended financing arrangements, waivers of applicability will be required for the GRA-financed arrangement if the review is conducted after the most recent test date has passed and data are not yet available. - With respect to the GRA financial arrangement, the member may purchase any amount available based on earlier completed reviews if the purchase is requested within 45 days of the most recent test date and all conditions specified in paragraph 2 of the Reduction of Blackout Periods in GRA arrangements decision (Decision No. 14407-(09/105)) are met. - Modifications to Board-set conditionality may be appropriate when departures from PCs are expected (e.g., when basic program assumptions have not been realized or significant unanticipated developments occur), provided targets remain macro-critical. - Requests for such modifications must be made by the authorities and supported by staff in the Staff Report submitted to the Board before the relevant test date has passed and must be approved by the Board before information on the observance of the PC is available, normally in the context of a program review. - In exceptional cases, modifications can be approved outside the context of a program review provided authorities and staff have common policy understandings documented in a revised or new LOI with an updated PC table and, where relevant, TMU. ### Misreporting and noncomplying disbursements - Misreporting occurs when members with a Fund-supported program obtain resources on the basis of inaccurate information regarding observance of quantitative or continuous PCs or prior actions (a “noncomplying disbursement”). - Under the SCF arrangement, a noncomplying disbursement occurs when: - (i) the Fund makes a disbursement on the basis of a finding that applicable conditions established for that disbursement have been observed; and - (ii) that finding later proves to be incorrect. - Upon evidence that a member may have received a noncomplying disbursement, the MD shall inform the member promptly. After consultation, if the MD determines a noncomplying disbursement occurred, the MD shall notify the member and submit a report to the Executive Board with recommendations. - The Board may decide either: - (a) that the member shall be expected to repurchase/repay the disbursed amount, or - (b) that the non-observance will be waived. - Waivers will normally be granted only when the deviation was minor or temporary, or if the member adopted additional measures appropriate to achieve the objectives supported by the relevant decision on the disbursement. - Relevant information on misreporting should be made public by including it in documents to be published after the Board discussion, such as a press release containing the Chairman’s Statement or summing up, with prior Board review of the text for publication. - If the Executive Board finds the noncomplying disbursement was made but the non-observance was de minimis misreporting (i.e., a deviation so small as to be trivial with no impact on assessment), a waiver for non-observance may be considered. *Source: ppea2025010 - 162. DSAs for LICs should be presented as self-contained documents (see Appendix IX).* ### Section 5 regarding members’ obligations on data provision for Fund’s activities. ### Section 5 regarding members’ obligations on data provision for Fund’s activities ### I. Reviews and Disbursements — Purpose of Program Reviews - Program reviews evaluate whether the program is on track to achieve its objectives based on: - backward-looking assessment: performance against quantitative PCs, structural and quantitative benchmarks, and prior actions; and - forward-looking assessment: prospects for successful program implementation, including whether policy capacity and commitments are adequate to achieve the program’s objectives. - At the time of the consideration of the final review under an SCF arrangement, and assuming no further program support from the Fund is expected, the scope of the forward-looking assessment could be more limited than for previous reviews. - Reviews also update program design by specifying forward-looking policies and conditionality and are the main vehicle for potential modifications to program design (e.g., changes in access, phasing, and conditionality). - At approval and for each review: - the authorities’ LOI presents or updates their policy program; - a staff report provides an overall assessment of performance and policy commitments. ### Timing of Reviews, Test Dates, and Disbursements - Timing and specification: - The timing of all reviews, test dates, and disbursements is summarized in a staff report table at approval and updated as needed at reviews. - The Arrangement text attached to the staff report for the initial SCF request specifies the test dates, reviews, availability dates, and disbursements for the first year. - The quantitative indicator table (“PC table”) attached to the LOI/MEFP should clearly identify PCs, indicative targets, and adjustors for at least a 12-month period from the Board date of program approval or review. - The structural benchmark table should cover measures over at least a 12-month period, indicating the reviews individual benchmarks are linked to. - The text of the arrangement attached to the staff report should specify all PCs and review/availability dates normally over the next 12 months from the Board date of program approval/review. - Disbursement conditions: - The first disbursement is made available upon approval of the arrangement. - Subsequent disbursements will be conditional on observance of PCs and a program review confirming satisfactory progress and continued adequate safeguards. - Frequency and alignment: - Disbursements and reviews are expected to normally be semiannual, or quarterly when closer monitoring is needed. - Reviews and associated availability dates must be scheduled no more than six months apart (the interval between program approval and the first availability date could be longer than six months to harmonize with budget cycle). - There is flexibility to set specific review and test dates based on country-specific circumstances and to deviate from the six-monthly schedule. - Shifts between semiannual reviews and higher frequencies can occur during an arrangement or be scheduled at approval based on projected risk profile. - Test dates and availability dates: - Test dates for PCs must be set so all scheduled disbursements can take place before the end of the SCF arrangement, accounting for reporting lags and staff report preparation/circulation periods. - Availability dates should be set so all data needed to confirm observance of PCs at the related test dates would have become available. - Availability dates are specified in the Arrangement text and summarized in the staff report table; reviews cannot be completed prior to the applicable availability date. - Program period: - The program period typically starts somewhat before Board approval and three to six months before the first test date under semi-annual monitoring. - The program period should normally not start more than three months prior to the Board meeting, and in any case not before authorities and staff have discussed program parameters. - Blackout periods: - In contrast to SBAs, SCF arrangement design typically avoids “blackout periods” because each disbursement is linked to a specific review and observance of specific periodic PCs. - A disbursement is not blocked when a new test date passes because the new test date applies to a future disbursement subject to completion of a future scheduled review. - Previously approved disbursements may still be blocked once a scheduled review date has passed or if a continuous PC has not been met. ### Addressing Interruptions in Program Implementation: Track Records, Combined Reviews, and Rephasing - Track records and alternatives: - If interruptions/delays are caused by substantial policy slippages, establishing a track record before completing the review is often appropriate. - A track record could be informal (time-bound policy actions/targets), monitored under an SMP, or—in case of urgent financing needs caused by an exogenous shock—the RCF (assuming applicable policy commitments are in place), or concurrent use of the above instruments. - Combining reviews: - Two reviews can be combined when delays occurred and performance can be assessed against two test dates linked to successive reviews. - Combining three or more reviews is very unusual because PCs are typically not defined for more than two future test dates under semiannual monitoring and long deviations from objectives may justify cancellation. - Combining reviews is only possible if: - (i) conditionality has been fully defined, including applicable PCs, and approved by the Board; - (ii) data are available for measuring observance of conditionality for the reviews; and - (iii) the anticipated dates for conclusion of the reviews in the text of the arrangement have all passed. - Reviews are typically combined when the program is on track with respect to the most recent review and sufficient corrective action has offset problems with earlier reviews; reviews should not be combined when slippages relative to the most recent review are significant. - Alternatives when slippages are significant include cancellation of the arrangement and discussion of support under a new instrument, or completion of the past review with new future test dates and conditionality combined with rephasing of access. - Rephasing disbursements: - Disbursements may be rephased to change financing amounts, number, or timing of disbursements and reviews. - Rephasing can spread access associated with specific reviews across future reviews, consistent with the current arrangement period. - Rephasing may be combined with an extension of the arrangement when few reviews remain. - Technical short-term extensions (typically not more than three months) can be used to complete final reviews and make final disbursement before expiration without rephasing. - Access must never be rephased in a manner that makes it impossible for the member to obtain the full undisbursed amount under the arrangement. - If delays are substantial and rephasing would compress a very large amount of access into a short time, it is normally appropriate to let the arrangement expire or be canceled and proceed to a new SCF arrangement, unless there has been a very sharp turnaround in performance. - Drawing outside scheduled reviews: - A country may draw outside scheduled reviews previously approved but undrawn if: - (i) its representation of a balance of payments need meets the requirements of the PRGT instrument; - (ii) the most recently scheduled review under the arrangement prior to the request has been completed; and - (iii) available information indicates continuous PCs are being met. - The PRGT Instrument precludes staff from challenging a member’s representation of a balance of payments need prior to providing the requested disbursement, but if the Board later decides the disbursement took place in the absence of a balance of payments need, it could seek early repayment with interest normally within 30 days of the Board’s decision. - To draw outside scheduled reviews, the member must send a letter to the MD communicating and explaining the decision; staff will circulate a short note for information to the Board, attaching the authorities’ letter, and a press release is issued shortly afterwards. ### J. Other Relevant Policies - Ex-Post Peer Review Assessments (PRAs): - Access to resources under SCF arrangements counts toward the policy on LTPE, except if the arrangement was treated in its entirety as precautionary and no disbursements were made. - Members that have had a UCT arrangement in place for at least seven out of the past 10 years, and for whom a PRA has not been prepared in the past five years, an ex post peer review assessment should be prepared in time to be considered by the Board at the time of a request for a new Fund arrangement. - Post-Financing Assessments (PFAs): - Outstanding SCF credit is subject to PFA (formerly PPM). - Members with outstanding credit from the Fund in the GRA and/or PRGT and/or the RST exceeding 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met) or SDR 0.38 billion from the PRGT (and/or SDR 1.5 billion from the GRA and/or SDR 0.38 billion from the RST) after the expiry of their arrangements are expected, upon the recommendation of the MD, to engage in a PFA of their economic developments and policies. - Normally one stand-alone PFA paper is expected to be issued for Executive Board consideration within a 12-month period. - Article IV consultation cycle: - The 24-month cycle for Article IV consultations applies to members with an SCF arrangement. - Article IV consultations with members that have an on-track SCF arrangement would be expected to be completed within 24 months after the completion of the previous Article IV consultation. - If a program review is not completed by the date specified in the arrangement, the next Article IV consultation is expected to be completed by the later of: - (i) six months after the scheduled review date; and - (ii) 12 months, plus a grace period of three months after the previous Article IV consultation; - unless the program review has been completed prior to the later of these two dates, in which case the 24-month cycle continues to apply. - A member that has completed an SCF arrangement by drawing all amounts may remain on the 24-month cycle if it does not meet any of the criteria in paragraph 2 of Decision No. 14747-(10/96), as amended: (i) systemic or regional importance; (ii) perceived to be at risk, or facing pressing policy issues of broad interest; or (iii) outstanding Fund credit exceeding 150 percent of quota (100 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met) percent of quota. - At the time of the final review, staff should assess whether the consultation cycle should be shortened back to 12 months based on the above criteria; the staff report for the final review should seek the Board’s approval of such shortening when applicable. - Where the arrangement is cancelled by the member or expires with undrawn amounts, the member will remain on the existing cycle unless the Executive Board determines a different cycle will apply based on the criteria above. - Exchange system and data provision obligations: - Article VIII Acceptance by IMF Members—Recent Trends and Implications for the Fund (IMF, 2006d) and the new policy on Multiple Currency Practices (MCPs), effective February 1, 2024, are discussed in Guidance for the Fund’s policy on Multiple Currency Practices. - A standard continuous PC applies, inter alia, to the non-introduction or intensification of exchange restrictions and to the non-introduction or modification of multiple currency practices (see Appendix II, Section G). - Article VIII, Section 5 of the Fund’s Articles of Agreement does not apply to the provision of information that is required for the purposes of Fund financial assistance under the SCF. - Note: PRGT resources are held in an administered account and obligations of a member using such resources are not governed by the Fund’s Articles (Article V, Section 2(b)). Obligations of a member using PRGT resources are governed exclusively by the terms of the PRGT Instrument, which are incorporated by explicit reference into the terms of each SCF arrangement. Accordingly, for the purposes of an SCF arrangement, the Fund cannot require a member to provide the Fund with information for the purposes of Article VIII, Section 5, and failure to provide information for the purposes of an SCF arrangement cannot give rise to sanctions under Article XXVI, Section 2, as it is not a breach of obligation under the Articles of Agreement. - HIPC: - Performance under an SCF arrangement can count toward a track record of strong policy performance under Fund-supported programs required for the HIPC decision point and completion point. - The minimum required track record for the decision point is six months. - For the completion point, there is no minimum duration for the track record (except where Fund-supported programs have been off track for more than six months); instead, assessment is based on performance on particular outcomes. - Side letters: - Use of side letters in SCF arrangements has been extremely rare. - Side letters may be used when release of information on policy understandings at the time of a program request or review would cause adverse market reaction or undermine authorities’ efforts to prepare domestic groundwork for a measure. *Source: ppea2025010 - Section 5 regarding members’ obligations on data provision for Fund’s activities.* ### CHAPTER IV: RAPID CREDIT FACILITY ______________________________________________________ 108 ### CHAPTER IV: RAPID CREDIT FACILITY ### A. Objectives and Qualification - Purpose and objective: - The RCF provides rapid concessional financial assistance as outright disbursements to LICs facing urgent balance of payments needs, including needs caused by exogenous shocks, natural disasters, and emergence from conflict, as well as domestic instability, emergencies, and fragility. - The RCF is designed where a multi-year UCT-quality Fund-supported program is either not necessary or not feasible (e.g., due to limited capacity in post-conflict, disaster, or fragile situations or when more time is needed to design a multiyear program). - Repeated use of the RCF may be warranted under certain circumstances and subject to limitations under the legal framework of the PRGT Instrument. - The purpose of RCF support is to help members address urgent balance of payments needs and assist them in implementing economic policies that enable progress towards achieving or restoring a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - The RCF assists countries by providing temporary concessional financial support to smooth economic adjustment, avoid excess volatility, replenish international reserves, loosen financing constraints, provide policy support, and catalyze additional financing from donors. - Windows and thresholds: - Regular window (not linked to a specific shock). - Exogenous shock window for urgent needs primarily from a sudden and exogenous shock. - Large natural disaster window for urgent needs due to a large natural disaster where resulting damages are equivalent to at least 20 percent of GDP. - A temporary food shock window (FSW) was available under the RCF from September 30, 2022 to end-March 2024 to qualifying countries affected by the global food shock. - The RCF was created on January 7, 2010; access norms and limits were raised in 2015, 2019, and 2021; the 2024 PRGT Review extended the higher RCF cumulative access limits until end-December 2025. - Qualification: - Assistance is available to PRGT-eligible members facing urgent balance of payments needs unless (i) difficulties are predominantly caused by a withdrawal in donor support or (ii) a UCT-quality program is both feasible and necessary. - An urgent balance of payments need: a present need that, if not addressed, would result in immediate and severe economic disruption. - The RCF is appropriate when either: - the balance of payments need is expected to be resolved within one year and no major policy adjustments are necessary; or - a UCT-quality program cannot be put in place owing to limited policy implementation capacity or the urgency of the need. - For countries seeking to build a track record toward a UCT-quality program, an SMP is normally preferred; policy commitments in a recent RCF disbursement can be used to build the policy track record. - Qualification requires ex-ante policy undertakings, typically outlined in a LOI, including commitments not to introduce or intensify exchange and trade restrictions, sufficient policy capacity and commitment to safeguard Fund resources, and cooperation with the Fund to find solutions where appropriate. ### B. Repeated Use - Modality: - RCF resources are provided as outright loan disbursements and not phased under an arrangement. - Support can be one-off or provided under repeated disbursements over a limited period; each disbursement is requested and approved separately. - Policy commitments under repeated RCF use should typically facilitate transition to a UCT-quality program (normally supported under the ECF). - Use in post-conflict and similar situations is similar to the RFI (previously Emergency Post-Conflict Assistance). - Where building a track record for a UCT-quality program, concurrent use of an SMP is normally preferred; RCF with appropriate policy understandings can also build the track record. - Limits on repeat use to mitigate moral hazard: - A member may not receive more than two RCF disbursements in any 12-month period. - A member can only receive more than one RCF disbursement in any three-year period if: - the balance of payments need was caused primarily by a sudden, exogenous shock (qualifying under the exogenous shocks window or large natural disaster window where damage is assessed to be equivalent to or exceed 20 percent of GDP); or - the member has established a track record of adequate macroeconomic policies for a period of at least six months prior to the request. ### C. Concurrent Use and Blending - Concurrent use: - Generally, RCF financing will not be provided if a UCT-quality Fund-supported program (e.g., ECF or SCF) is in place, on track, and feasible. - RCF financing during an ECF or SCF arrangement is possible only when: - disbursements under the ECF or SCF are not possible (e.g., due to policy slippages or delays), - RCF qualification requirements are met (including an urgent balance of payments need and relevant policy commitments), and - the balance of payments need is primarily caused by a sudden exogenous shock. - When access under the RCF exceeds 25 percent of quota by using the exogenous shocks or large natural disasters windows, existing and prospective policies should be sufficiently strong to address the shock. - RCF-supported policies could serve as a track record to bring an ECF- or SCF-supported program back on track. - The RCF can be used concurrently with GRA financing under certain circumstances. - Interaction with PCI and SMP: - The RCF can be combined with a PCI or an SMP. - Satisfactory performance under a PCI or SMP for at least six months would normally satisfy the track record requirement for repeated RCF use and facilitate rapid disbursement. - A short LOI and short staff paper normally suffice for requesting an RCF disbursement when an urgent need arises during an on-track PCI or SMP. - Blending: - When blending, RCF resources will normally be provided together with GRA resources under the RFI. - Use of RCF with GRA arrangements is expected where pre-existing SBA or extended arrangements are off track; RCF financing would normally be blended with RFI financing in such cases. - Modalities and documentation of blended RCF-GRA financing are broadly the same as those for stand-alone RCF disbursements. - Blended financing implies lower average concessionality of Fund support than stand-alone RCF support. - RFI qualification requirements must be met when applicable. ### D. Access - Process and criteria: - Area departments should consult SPR and FIN early when considering access. - Staff reports must explicitly discuss the basis on which access was determined, referencing main criteria and access limits. - Access determination is case-by-case based on: - the member’s urgent balance of payments need (considering all balance of payments flows, including reserve accumulation and other financing sources); - the strength of its policies and capacity to repay the Fund (policy plans, adjustment effort, commitment, institutional capacity, track record, vulnerabilities, imbalances, and debt sustainability); - the amount of outstanding Fund credit and the member’s record of past use. - Higher access is generally associated with stronger policies, stronger track record, and stronger capacity to repay; access also takes into account size and likely persistence of the shock. - Any RCF disbursement may not exceed the member’s balance of payments need and would typically be less than total financing needs; members must represent in a LOI that they are experiencing an urgent balance of payments need. - In repeated disbursements, timing and amounts need not mirror projected financing needs; given limits on number of disbursements and sub-ceilings, disbursements often cover only a small part of total financing needs. - Access limits (PRGT global and RCF sub-ceilings): - PRGT global normal limits: - total access per year: 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met); - total cumulative access: 600 percent of quota (405 percent of quota when the general conditions for effectiveness of the 16th GRQ increases have been met). - PRGT exceptional access can allow access above normal global limits in exceptional circumstances. - RCF regular window sub-ceilings: - annual (over any 12-month period): 50 percent of quota (35 percent of quota when the 16th GRQ increases have been met); - cumulative (total stock of RCF credit outstanding at any point in time): 100 percent of quota (70 percent of quota when the 16th GRQ increases have been met); - per disbursement limit: 25 percent of quota (17.5 percent of quota when the 16th GRQ increases have been met). - Annual access in excess of 25 percent of quota (17.5 percent of quota when the 16th GRQ increases have been met) under the regular window would require an additional RCF disbursement within the year and, absent an exogenous shock or large natural disaster, would need to be linked to a track record of adequate macroeconomic policies (e.g., through an SMP). *Source: CHAPTER IV: RAPID CREDIT FACILITY, LIC FACILITIES HANDBOOK: RAPID CREDIT FACILITY, INTERNATIONAL MONETARY FUND, 2025* ### 210. Access to the RCF under the exogenous shock window is subject to a sub-ceiling of ### ppea2025010 - 210. Access to the RCF under the exogenous shock window is subject to a sub-ceiling of ### RCF Access Limits and Temporary Increases - Exogenous shock window sub-ceiling: 50 percent of quota per year. - Cumulative limit (normal): 100 percent of quota. - Cumulative limit (when general conditions for effectiveness of the 16th GRQ increases have been met): 70 percent of quota. - Covid-19 temporary cumulative increase: 150 percent of quota. - Covid-19 temporary cumulative increase when 16th GRQ conditions met: 105 percent of quota. - Applicability of Covid-19 increased cumulative limits: will stay applicable until end-December 2025. - Purchases under the RFI made after July 1, 2015 count towards the applicable RCF annual and cumulative sub-ceilings. - Large natural disasters window annual access (normal): up to 80 percent of quota per year. - Large natural disasters window annual access when 16th GRQ conditions met: 55 percent of quota per year. - Trigger for large natural disasters window: damage assessed to be equivalent to or exceed 20 percent of the member’s GDP. - Large natural disasters window cumulative access (increased on account of Covid-19): up to 183.33 percent of quota. - Large natural disasters window cumulative access when 16th GRQ conditions met: 125 percent of quota. - Applicability of Covid-19 increased cumulative limits for this window: will stay applicable until end-December 2025. - Regular window annual access norm: 25 percent of quota (one-half of the annual access limit). - Regular window annual access when 16th GRQ conditions met: 17.5 percent of quota. - Note: As with the ECF and SCF, the norm is neither a floor nor a ceiling. ### Conditions for Access under Exogenous Shocks and Large Natural Disasters - RCF financing through “exogenous shock” and “large natural disasters” windows is available provided that: - (i) the primary cause of the balance of payments need is a sudden exogenous shock, other than a withdrawal in financial assistance by donors (or, in the case of the large natural disasters window, a natural disaster); and - (ii) existing and prospective policies are sufficiently strong to address the shock. - An exogenous shock may include both economic (e.g., terms of trade) and non-economic shocks (e.g., natural disasters) that are sudden and not related to members’ policies. - The amount of access provided under these windows cannot exceed the size of the financing need created by the shock. - There are no norms for access under the RCF “exogenous shocks” and “large natural disaster” windows; the sub-ceilings should not be considered norms. - Individual disbursements would in most cases be below the applicable annual sub-ceilings. - Example thresholds where large disbursements would be expected only when financing need is very large and economic policy context is relatively strong: - 50 percent of quota under the “exogenous shocks” window (35 percent of quota when 16th GRQ conditions met). - 80 percent of quota under the “large natural disasters” window (55 percent of quota when 16th GRQ conditions met). ### Access Under Blended Financial Assistance - When RCF disbursements are blended with concurrent GRA disbursements, total access to financial assistance is determined based on the standard criteria so that total access should be comparable across countries with similar balance of payments needs, strength of policies, and outstanding Fund credit. - For presumed blenders, access to the concessional (RCF) financing component of blended assistance is in a 1:2 ratio of PRGT to GRA resources, with the remainder met by GRA financing. - Any RFI access is counted towards the annual and cumulative RCF access limits, irrespective of the RCF window. - Access to concessional financing for presumed blenders is capped at the limits on normal annual and cumulative access to the PRGT. ### Procedural Safeguards on High Access Requests — DSAs and Informal Board Meetings - Financing requests are subject to procedural safeguards that apply uniformly across all concessional facilities to protect PRGT-eligible members’ debt sustainability and the Fund’s concessional resources. - Staff report requirements: - Provide an up-to-date assessment of debt vulnerabilities, with explicit reference to the impact of new borrowing from all sources, including prospective IMF disbursements. - Debt Sustainability Analyses (DSAs): - A new DSA is required for any new financing request under the PRGT, for IMF country documents that propose modification to, or a waiver for non-observance of, a performance criterion related to debt limits, and when there are significant changes in economic circumstances and borrowing assumptions. - For financing requests that: (i) involve exceptional access to PRGT; (ii) trigger SPS2; or (iii) involve a member with a high risk of debt distress or in debt distress, a DSA is required to support the access level. - Informal Board meetings and early notice: - An early informal Board meeting is required if a financing request under the PRGT would involve (i) exceptional access or (ii) SPS2. - Staff would provide early notice to the Board (for instance in an informal country matters session) of upcoming financing requests where the envisaged financing commitment, in absolute terms, would have a large impact on the Fund’s overall concessional resources. - Exception: the requirement for an informal Board meeting in SPS2 does not apply for new financing requests less than 25 percent of quota (15 percent of quota when 16th GRQ conditions met). - High combined credit: - Requests that result in combined PRGT and GRA access in excess of the GRA access limits are subject to the Policy Safeguards on High Combined Credit Exposure (PS-HCC). - The PS-HCC criteria and procedural requirements apply at the financing request and at subsequent reviews; criteria are substantively the same as PRGT exceptional access framework except they do not include an income threshold. ### Financing Terms - Repayments of RCF credit: - Made in 10 equal semiannual installments. - Subject to a 5.5-year grace period from the date of the disbursement. - 10-year final maturity. - Interest: - Interest will be assessed and paid quarterly, beginning May 1, 2025. - Applicable interest rates determined based on the country’s tier status at the time of Board approval of a new RCF loan. - RCF credit will remain interest-free for the poorest PRGT-eligible members (Tier 1). - Other PRGT-eligible members: - Presumed blenders (Tier2A): 70 percent of the SDRi. - Non-presumed blenders (Tier2B): 40 percent of the SDRi. - These interest rates will apply to all outstanding credit under RCFs approved on or after May 1, 2025. - Overdue interest on overdue repayments of PRGT loans is charged at a rate equal to the SDR interest rate. ### Financing Assurances, Arrears, and Safeguards - Financing assurances: - Fund’s policy on financing assurances requires that financial arrangements can only be approved (and reviews completed) when the program is fully financed. - Financing assurances are not required for RCF disbursements with no debt restructuring, given there is no underlying economic program. - Financing assurances to restore debt sustainability are required for RCF financing requests when a debt restructuring is pursued to restore debt sustainability in the context of that stand-alone emergency financing request. - Staff reports for RCF requests should provide information on projected financing gaps. - Where the RCF may be used to build a track record for a UCT-quality Fund-supported program, staff should discuss prospects for financing assurances required for such an arrangement. - Assurances should be given that the member country has the capacity to repay the Fund based on medium-term balance of payments projections and the standardized table on indicators of the capacity to repay the Fund. - Arrears to IFIs and bilateral creditors: - In cases where a member has arrears to an IFI, the Fund will apply either the NTP policy or the LIOA policy, including for emergency financing under the RCF. - For arrears to official bilateral creditors: - If arrears do not require restructuring and payment in full is anticipated (non-OSI cases), the Fund maintains a policy of non-toleration (tacit approval of an official bilateral creditor’s Executive Director has been deemed sufficient in practice). - If restructuring of arrears is required or the claim is covered by a past restructuring (OSI cases), the direct bilateral claim is subject to the LIOA policy; the Fund may provide financing only under carefully circumscribed circumstances. - In a small subset of emergency situations (e.g., aftermath of a natural disaster) where urgent BOP need arose from exogenous shocks and there is insufficient time for the debtor to undertake good faith efforts, the Fund may provide financing under the RCF despite arrears on direct bilateral and some IFI claims without meeting the requirements set forth in the LIOA unless it is a case of long-standing arrears. Debtor authorities must commit to make good-faith efforts toward resolution of arrears. - LIA policy for private external creditors and non-sovereign arrears: - The Fund can lend in a situation of sovereign arrears to private external creditors only where: (i) prompt Fund support is essential for successful implementation of the member’s adjustment program; and (ii) the member is pursuing appropriate policies and making a good faith effort to reach a collaborative agreement with creditors. - In a small subset of emergency situations (e.g., wake of conflict or natural catastrophe) where urgent BOP need arises from exogenous shocks and insufficient time exists for good faith creditor efforts, the Fund may provide financing under the RCF despite arrears owed to private creditors without assessing whether the good-faith criterion has been met. It is expected that Fund support would help advance normalization of relations and resolution of arrears; subsequent Fund arrangements would again be subject to the LIA policy. - Staff reports should provide information on arrears to private external creditors. - Overdue obligations to the Fund: - If a member is in arrears to the Fund in the GRA, the Special Disbursement Account, the SDR Department, or to the Fund as Trustee (including the PRGT and RST), a request for IMF financing, including under the RCF, will not be approved and disbursements under an existing arrangement would be suspended. - One month after a financial obligation becomes overdue, the MD will notify the Executive Board that an obligation is overdue. - A report by the MD will be issued two months after an obligation becomes overdue and will be given substantive consideration by the Executive Board one month later; the report will request that the Executive Board limit the member’s use of Trust resources. - A factual statement noting the existence and amount of arrears outstanding for more than three months will be posted on the member’s country-specific page on the Fund’s external website. - Once the Executive Board adopts a decision to limit the member’s use of Trust resources, a press release will be issued. - The MD may recommend advancing or postponing (for up to one-year periods in exceptional circumstances) the Executive Board’s consideration of reports regarding overdue obligations. - While a member is in arrears to the Fund, policy support can only be provided through surveillance, technical assistance, and, under certain circumstances, SMPs. - Remedial measures for PRGT arrears include removal from the list of PRGT-eligible countries, declaration of noncooperation with the PRGT Trust, and suspension of technical assistance. - Annual reports and financial statements will identify members with overdue obligations to the Trust outstanding for more than six months. *Source: ppea2025010 - 210. Access to the RCF under the exogenous shock window is subject to a sub-ceiling of* ### 225. Under the RCF, a member’s request for assistance will require a commitment to undergo a ### 225. Under the RCF, a member’s request for assistance will require a commitment to undergo a safeguards assessment ### Safeguards assessment: requirements and process - A member’s request for RCF assistance requires: - a commitment to undergo a safeguards assessment; and - to provide Fund staff access to the central bank’s most recently completed external audit reports (whether or not the audit is published). - The member shall authorize its external auditors to hold discussions with staff. - The commitment and authorization are to be provided at the time when the member makes a formal written request for RCF resources. - Timing and modalities of the assessment are determined on a case-by-case basis depending on the institutional and administrative capacity of the central bank. - It is presumed that the safeguards assessment would have been completed before Board approval of any subsequent arrangement to which the Fund’s safeguards policy applies. - The safeguards process involves continuous analysis of information obtained primarily through: - collection of documents, and - discussions with the authorities and the central bank’s external auditors. - The assessment evaluates the central bank’s safeguards framework covering governance, auditing, financial reporting, control systems, autonomy, mandate and legal framework over the life of an arrangement and for as long as Fund credit remains outstanding. - Close cooperation and coordination between FIN, other functional departments, and area departments is essential; FIN should be kept informed by area departments of safeguards issues, including logistical issues such as the timing of new arrangements. ### Policy objectives (RCF policy standard and member policies) - The member’s policies should not compound existing balance of payments difficulties and should generally be aimed at making progress toward achieving or restoring a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth (see definition in Section A). - Objectives include steps to address, though not necessarily resolve, the country’s macroeconomic imbalances and maintain or move toward: - (i) strong and durable poverty reduction and growth, - (ii) low or moderate inflation, - (iii) sustainable fiscal and current account balances, - (iv) limited debt vulnerabilities, - (v) adequate international reserves, and - (vi) sufficient policy and institutional capacity to implement appropriate macroeconomic policies. - RCF-supported policies should, to the extent possible, be aligned with the country’s own poverty reduction and growth objectives. - The LOI and staff report for an RCF request should discuss the current situation, including the cause of the urgent balance of payments need, and macroeconomic prospects. - Near-term RCF-supported policies should be clearly articulated in the LOI and MEFP (optional) and associated staff report, and should be consistent with the country’s medium- and longer-term policy objectives, which would typically include: - Fiscal policies where: - (i) the fiscal stance is well anchored to help ensure macroeconomic stability and fiscal/debt sustainability, - (ii) revenue and spending policies take due account of the country’s growth and social objectives, and - (iii) budgets are guided by medium-term fiscal frameworks to the extent possible. - Monetary policies consistent with inflation, exchange rate, and reserve objectives, while taking due account of cyclical considerations. - Exchange rate policies that ensure a unified exchange rate and a real exchange rate level broadly in line with fundamentals, ensuring a stable and sustainable external position consistent with adequate growth. - Financial sector policies geared toward financial stability and deepening to foster investment and forestall financial crises. - Public financial management reforms to ensure resources are tracked, reported, and targeted appropriately (including providing adequate resources for social and other priority spending), public debt management to support debt sustainability, and revenue reforms to broaden the revenue base and enhance tax efficiencies. - Other structural reforms critical for achieving the member’s macroeconomic objectives. ### Role of RCF financial support - RCF balance of payments support can assist countries in smoothing adjustment toward a more stable and sustainable macroeconomic position. - Fund financial support can be used to: - replenish international reserves of the member country; and - provide liquidity for making external payments. - By relaxing external financing constraints, Fund support also loosens domestic liquidity constraints for both the public and private sector. - Fund financing reduces the need for retrenchment in public and private savings-investment balances, thus enhancing policy options (allowing less contractionary fiscal, monetary, and exchange rate policies) and cushioning private sector adjustment (e.g., investment and import declines). - The appropriate mix of financing and public/private adjustment is determined on a case-by-case basis. - A member may choose to use the domestic counterpart of RCF resources to finance, directly or indirectly, the government budget deficit; such budget financing is consistent with the Fund’s legal framework provided the member has balance of payments problems and is implementing a program to resolve them. - Direct budget financing may be appropriate when: - (i) the policies are designed so the entire amount of the Fund’s financial support is used to meet a present or prospective balance of payments need, - (ii) loosening fiscal financing constraints is an important macroeconomic objective under the policies, and - (iii) the central bank cannot or should not lend to the government while the domestic financial sector is too shallow or not stable enough to provide necessary budget financing (or the central bank plays a largely passive domestic policy role). - Staff reports should justify use of domestic counterparts for budget financing where relevant and discuss safeguards implications, including concluding a memorandum of understanding between the central bank and fiscal authorities where appropriate. ### Links to Poverty Reduction Strategies and social spending - RCF-supported policies should generally be aligned with the country’s poverty reduction and growth objectives. - Any financing request under the RCF must be accompanied by a statement, normally in the LOI or MEFP, of how the RCF-supported policies advance the country’s poverty reduction and growth objectives—linkage may be indirect (e.g., via macroeconomic stability). - Where a relevant PRS document exists, the LOI/MEFP description could cross-reference the PRS document, and RCF-supported policies should take into account and, to the extent possible, be consistent with PRS objectives in promoting a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. - PRS documents are not required for RCF disbursements. - Whenever a future ECF- or SCF-supported program is under consideration, staff should inform authorities early about definitions and timelines for PRGS requirements (Appendix V). - Social and other priority spending should be safeguarded and, whenever appropriate, increased under RCF-supported policies. - When LOI/MEFP includes indicative targets (e.g., to establish a track record for repeated RCF use), these should include a floor on social and other priority spending, whenever possible. - Definition of social or other priority spending should be consistent with authorities’ poverty reduction and growth objectives. - If tracking such expenditures is not feasible, RCF documentation should report measures to develop an adequate tracking system; staff should monitor progress and the program may include structural measures to that end. ### Debt Sustainability Analysis (DSA) - RCF-supported policies should be underpinned by a thorough DSA to inform medium-term debt strategies and fiscal frameworks. - Country teams should engage authorities in preparation of DSAs, discuss results, and share final files with relevant officials. - DSAs for LICs should be prepared jointly with the World Bank, and country teams should involve other relevant MDBs; joint DSAs are required for all PRGT-eligible countries that also have access to IDA resources. - A full DSA should generally be produced at least once every calendar year. - A new DSA should be produced for any new request for IMF financing (even when an annual DSA has already been completed). - DSAs for LICs should be presented as self-contained documents and normally prepared using the LIC DSF. - The LIC DSF analysis includes three components: - a forward-looking analysis (20-year projection) of debt and debt-service dynamics under a baseline scenario, alternative scenarios, and standardized stress tests; - an explicit rating of the risk of external debt distress (low, moderate, high, or in debt distress) based on indicative country-specific debt-burden thresholds that depend on the quality of policies and institutions in the country; and an assessment of the overall risk of debt distress; and - recommendations on a borrowing (and lending) strategy and other crucial macro policies to limit the risk of debt distress while maximizing the resource envelope to achieve the country’s development objectives. ### Collaboration with the World Bank and other development partners - Fund staff should consult closely with all major development partners active in the country when designing and monitoring RCF-supported policies. - The JMAP approved by the Boards of the World Bank and IMF calls on Bank and Fund country teams to consult at least once a year to identify the country's key macroeconomic and structural reform challenges and coordinate work plans. ### Conditionality: design under the RCF - The RCF does not require a UCT-quality economic program, does not involve ex post conditionality (i.e., quantitative or continuous performance criteria), does not establish a time-bound arrangement, and does not require formal program reviews. - The RCF provides for outright disbursements based on a number of ex ante policy undertakings (see Section A on Eligibility and Qualification). ### Prior actions - Prior actions could be specified, if necessary, but would be expected only in exceptional circumstances when it is critical for addressing the urgent balance of payments need effectively that a measure be taken prior to RCF financial assistance. - Prior actions could be appropriate, for example, when the RCF is used after severe policy slippages that could call into question the authorities’ capacity and commitment to implement policies that would not compound balance of payments difficulties. - Prior actions should be implemented no later than five working days before the Board discussion. - Prior actions should be defined in the LOI/MEFP and cross-referenced in the Board Decision approving the disbursements. ### Monitoring policies under RCF support - RCF provides considerable flexibility to support forward-looking economic policies. - RCF disbursements do not require understandings on a program of economic policies other than general ex ante policy undertakings by the authorities (including commitment to cooperate with the Fund and not to introduce measures that would compound balance of payments difficulties). - RCF policy commitments can be used to: - provide general policy support; - establish a track record of economic performance (similar to an SMP); and - help monitor the implementation of UCT-quality economic policies when appropriate. - RCF support can be provided together with staff recommendations on macroeconomic policies, monitoring of economic performance, specific policy commitments and indicative targets, or any combination. - Where RCF supports a track record of policy performance, the LOI/MEFP for a disbursement request would typically set out agreed monitorable quantitative and structural indicators (indicative targets or benchmarks), based on specific test dates and deadlines. - Design of monitoring could mirror SMPs or past EPCAs, but is generally very flexible and would not require specification of a time-bound program period. - Targets do not have the status of PCs; waivers are not required if they are missed; program adjustors are not needed. - Quantitative periodic indicative targets could include measures of: - net international reserves, - central bank domestic assets, - domestic and fiscal balances or financing, - external debt, - social and other priority spending where possible, and - any other relevant macro-critical indicators. - Continuous measures could include commitments related to: - non-introduction of certain exchange restrictions and multiple currency practices, and - non-accumulation of external arrears. - RCF-supported policy track records could include an agenda for macro-critical structural reforms, with flexibility on timing of measures. - Structural benchmarks should be critical measures intended as clear markers in assessing progress on critical structural reforms and should be used parsimoniously with macro-criticality explicitly justified; structural benchmarks do not require a specific target date but should indicate envisaged time frame. ### Misreporting - Misreporting occurs when members with a Fund-supported program obtain resources on the basis of inaccurate information regarding observance of quantitative or continuous PCs or prior actions (a “noncomplying disbursement”). - As there are no PCs under the RCF, a noncomplying disbursement can only occur with respect to misreporting of prior actions (if applicable), specifically when: - (i) the Fund makes a disbursement on the basis of a finding that all prior actions established for that disbursement have been observed; and - (ii) that finding later proves to be incorrect. - Upon evidence that a member may have received a noncomplying disbursement, the MD shall inform the member promptly. - After consultation with the member, if the MD determines the member did receive a noncomplying disbursement, the MD shall promptly notify the member and submit a report to the Executive Board with recommendations. - The Board may decide either: - (a) that the member shall be expected to repurchase/repay the disbursed amount, or - (b) that the non-observance will be waived. - Waivers will normally be granted only when the deviation from the relevant condition was minor or temporary, or if, subsequent to the disbursement, the member had adopted additional measures appropriate to achieve the objectives supported by the relevant decision on the disbursement. - Relevant information on misreporting should be made public by including it in documents to be published after the Board discussion, such as a press release containing the Chairman’s Statement or summing up, with prior Board review of the text for publication. *Source: 2025 LIC FACILITIES HANDBOOK: RAPID CREDIT FACILITY, International Monetary Fund (excerpt).* ### 241. Whenever the Executive Board finds that a noncomplying disbursement has been ### ppea2025010 - 241. Whenever the Executive Board finds that a noncomplying disbursement has been ### De minimis misreporting and waivers - Whenever the Executive Board finds that a noncomplying disbursement has been made but that the non-observance of the relevant specified condition was also de minimis misreporting, a waiver for non-observance shall be granted by the Executive Board. - The discussion of de minimis misreporting will be included in a staff report on the member that deals with other issues but the discussion should be deleted if such a report is published. ### I. Track Records (RCF) - Purpose and use: - The RCF can be used to build a track record of policy performance to enable repeated disbursements under the RCF or to support a transition to a UCT-quality program. - Because the RCF involves outright disbursements without program reviews, there is no phasing of disbursements or test dates for indicative targets. - RCF-supported track records would typically include agreed monitorable quantitative and structural indicators (which could be called indicative targets or benchmarks). - Test dates and periodicity: - Test dates for quantitative targets can be set on a monthly, quarterly, semi-annual, or annual basis, including a combination thereof. - Test dates should generally be set such that they provide useful information for assessing performance in advance of potential future possible Fund support through the RCF. - Interaction with SMPs: - If a clear and explicit policy framework is needed to establish a track record for a UCT-quality program, an RCF could be used concurrently with an SMP. - Requirements for repeated disbursement: - A track record of adequate macroeconomic policies is required for an RCF disbursement when the member has already received RCF financing in the past three years and does not qualify under the “exogenous shocks” window or the “large natural disasters” window. - Such a track record would normally cover at least six months immediately prior to the disbursement, and the staff report should provide an assessment of past policy performance against any previously specified policy objectives and targets. - The track record period would normally start around the time the relevant track record objectives and policies become clear, and should start no earlier than the first-time substantive policy discussions on near-term macroeconomic targets started between the country team and the authorities, and no later than the time ad referendum understandings were reached on such targets. - Approval of a repeated disbursement would be based on a finding that the member’s overall policy performance was adequate, taking into consideration the severity of the economic situation and the member’s capacity. - In exceptional cases where no relevant pre-determined monitorable objectives exist at the time a successive RCF disbursement is requested in response to an urgent financing need, the track record could be based on the Fund’s assessment that macroeconomic policies have been adequate at least over the most recent six-month period. ### J. Other Relevant Policies (applicable to the RCF) - Ex-Post Peer Review Assessments (PRAs): - Access to resources under the RCF does not count toward the policy on LTPE or the requirement to conduct an Ex-Post Peer Reviewed assessment. - Post Financing Assessments (PFAs): - Outstanding RCF credit will be subject to PFA. - Normally, members with outstanding credit from the Fund in the GRA and/or PRGT and/or the RST exceeding 200 percent of quota (135 percent of quota when the general conditions for effectiveness of the 16th GRQ have been met) or SDR 0.38 billion from the PRGT (and/or SDR 1.5 billion from the GRA and/or 0.38 billion from the RST) after the expiry of their arrangements, are expected, upon the recommendation of the MD, to engage with the Fund in PFA of their economic developments and policies. - Normally one standalone PFA paper is expected to be issued for Executive Board consideration in a 12-month period. - Article IV consultation cycle: - RCF support does not alter the regular (typically 12-month) cycle for Article IV consultations. The pre-existing consultation cycle is preserved (12 or 24 month), at the time of RCF approval, subject to other conditions/criteria as specified in Decision No. 14747-(10/96). - Exchange system and data obligations: - Requirements under Article VIII Sections 2, 3, 4 and Article XIV are discussed in IMF (2006d) and the new policy on Multiple Currency Practices (MCPs), effective February 1, 2024, is discussed in Guidance for the Fund’s policy on Multiple Currency Practices. - The Fund may require members to furnish it with such information as it deems necessary for its activities, including program monitoring. - HIPC: - A period of performance under a monitorable track record supported by the RCF can count toward a track record of strong policy performance required for the HIPC decision point where the SMP has been endorsed by the Executive Board as being of UCT-quality. - The minimum required track record for the decision point is six months. - Side letters: - Side letters may be used when release of information on policy understandings at the time of a RCF request would cause adverse market reaction or undermine the authorities’ efforts to prepare the domestic groundwork for a measure. ### Appendix I. Historical evolution of the Fund’s concessional lending — Key milestones and reforms - 1975–1976: - 1975: Subsidy Account established to reduce borrowing costs from the Oil Facility. - 1976: Trust Fund established using proceeds of sales of 1/6 of the Fund’s pre-Second amendment gold. - 1986–1987: - 1986: Structural Adjustment Facility (SAF) created. - 1987: Enhanced Structural Adjustment Facility (ESAF) Trust established. - 1999–2009: - 1999: PRGF Trust created by reforming the ESAF Trust. - Mid-2000s: PRGF-ESF Trust established to strengthen concessional emergency assistance. - 2009: PRGT established as successor of the PRGF-ESF Trust; three lending facilities created: ECF, SCF, and RCF. - Post-2009 reviews and reforms (selected): - 2012-13 comprehensive review: - Adopted a three-pillar strategy for PRGT resources: (i) a base envelope (initially SDR 1¼ billion in annual lending capacity); (ii) contingent measures; and (iii) principle of self-sustainability. - 2015 targeted reforms: - Increased access limits of Emergency Financing instruments, set the interest rate on RCF to zero, and adjusted the blend of PRGT and GRA financing from 1:1 to 1:2. - 2018-19 comprehensive review: - Reforms included a generalized one-third increase in access limits and norms; additional RCF (and RFI) access increases for FCS and disaster-vulnerable states; blending policy reforms; strengthened safeguards for high access and exceptional access cases; and increased flexibility of PRGT instruments. - July 2021 ad-hoc PRGT review: - 45 percent increase in the normal limits on access to concessional financing; elimination of hard limits on exceptional access for the poorest countries; two-stage funding strategy to secure SDR 2.8 billion in subsidy resources and SDR 12.6 billion in loan resources as soon as feasible. - 2023 targeted interim review: - Raised the PRGT access limits to 200/600, in line with temporarily increased access limits under the GRA. - 2024 Review of the PRGT Facilities and Financing: - Aimed to identify a comprehensive reform package focused on: (i) estimating a long-term self-sustained annual lending envelope for PRGT; (ii) proposing policy changes to support that level of lending while mitigating risk and further prioritizing concessional resources to the poorest LICs; and (iii) securing funding to address the PRGT subsidy needs. ### Appendix II. Quantitative conditionality — Periodicity and definitions - Phasing and timing: - Quantitative PCs—or QTs in the case of the PCI—shall be phased no more than six months apart. - In practice, PCs are usually set on a semiannual basis and tied to semiannual program reviews, while indicative targets referred to as quantitative benchmarks are normally specified for the intervening quarters. - PCs and reviews could be at quarterly intervals where closer monitoring is helpful. - Some flexibility exists to align monitoring with national budget/reporting cycles, as long as deviations are minor. - Coverage and horizon: - Quantitative periodic conditionality should normally cover all test dates that fall within the 12 months after the Board meeting (initial approval or review). - Under semiannual monitoring, PCs would normally be established for two future test dates at the time of approval of the arrangement and at each review (except for the penultimate and final reviews). - When there is uncertainty relating to the PCs for the second test date, the targets may initially be set as indicative targets at the time of arrangement approval or review, and subsequently converted into PCs at the time of the next review. - The table of quantitative conditionality (the “PC table”) attached to the LOI/MEFP should clearly identify PCs, indicative targets, and adjustors for at least a 12-month period from the Board date of the arrangement approval or review. - Indicative targets should extend through the end of the calendar year (or fiscal year) for which policies are being discussed. *International Monetary Fund — 2025 LIC FACILITIES HANDBOOK: RAPID CREDIT FACILITY and Appendices* ### 3. The precise definitions of PCs should be set out in a TMU attached to the LOI. PCs and ### 3. The precise definitions of PCs should be set out in a TMU attached to the LOI. PCs and ### General principles for quantitative conditionality - Precise definitions of Performance Criteria (PCs) must be set out in a Technical Memorandum of Understanding (TMU) attached to the Letter of Intent (LOI). - PCs and indicative targets should relate to economic and financial variables that are critical for achieving program goals. - Definitions should be simple, clear, and enable objective staff monitoring and assessment. - Quantitative periodic conditionality is normally set as cumulative flows or changes in stocks from a single reference date (normally, the beginning of a calendar or fiscal year) through each test date. - The first reference date must coincide with or predate the start of the program period; the reference date would usually be moved ahead by one year on an annual basis. - Certain indicative targets (e.g., monetary aggregates or international reserves) may be set as period averages (e.g., over a number of days before or after the end-quarter date). - Quantitative PCs typically include: net international reserves, central bank net domestic assets, domestic and fiscal balances or financing, limits on external debt (where applicable), non-accumulation of external payments arrears, and other macro-critical indicators. - PCs are often subject to program adjustors reflecting deviations from projected external flows. - Indicative targets should include a floor on social and other priority spending where possible. ### B. Fiscal Targets - Programs should have fiscal PCs and indicative targets based on appropriate analytical fiscal indicators and desired institutional coverage. - Targets should cover all relevant government entities and transactions; most targets are specified at the level of the central government or the general government. - The TMU must provide a clear definition of "government" for fiscal PCs (e.g., central, central and local, or including non-financial public organizations). - Fiscal conditionality should be set on the indicator(s) most crucial for achieving program goals. - The near-term fiscal anchor is normally monitored through a PC on: - a credit aggregate (e.g., net domestic financing of the government or net banking system credit to the government), or - a deficit measure (e.g., the overall deficit or the primary deficit of the government), or - some combination of the above. - When addressing broad macroeconomic concerns, a deficit measure is more appropriate. - The overall deficit excluding grants often summarizes the impact of fiscal policy on aggregate demand and inflation. - The overall deficit including grants reflects the government’s borrowing requirement and debt accumulation. - Country-specific approaches: - Many LICs focus on domestic revenues and spending (excluding volatile donor-related receipts/outlays). - Countries with higher capacity may focus on the overall fiscal deficit. - Oil exporters may focus on non-oil balances. - Adjustors may be used to correct for volatile or one-off flows. - Where debt sustainability is a concern, the primary fiscal balance is sometimes used as an alternative to the overall balance. - It may be appropriate to set (typically indicative) fiscal targets on domestic revenue, domestic arrears, or on social and other priority spending. - Quality, accuracy, and timeliness of data determine the precise definition of fiscal targets and whether they should be PCs or indicative targets. - The fiscal PC measuring the general stance of fiscal policy is often measured using "below-the-line" financing data because such data are: - available more frequently, - more timely, and - of better quality. - Revenue and expenditure data should be monitored to establish an above-the-line fiscal deficit that can be reconciled with below-the-line financing data to reassure accuracy of the fiscal PC. - Exceptional receipts (e.g., privatization proceeds or petroleum fund receipts) should normally be defined as financing items for program purposes; provisions may allow some or all to be spent where appropriate. Underlying economics should guide treatment (one-off receipts should not finance permanent expenditure increases). - Social and other priority spending should generally be safeguarded in Fund-supported programs in LICs. - Monitor through explicit program targets, typically an indicative floor on social and other priority spending, whenever possible. - Definitions should be consistent with authorities’ poverty reduction and growth objectives. - If tracking is not feasible, program documentation should report measures to develop adequate tracking systems; staff should monitor progress and structural benchmarks may be included. ### C. Monetary Targets - Monetary developments are normally monitored by setting a PC on net domestic assets (NDA), either of the central bank or the banking system; central bank NDA is more likely in many LICs for data availability and quality reasons. - NDA of the central bank may be defined as reserve money minus net international reserves or reserve money minus net foreign assets. - Indicative targets may include reserve money, banking sector credit, or broad money when money or credit growth affects inflation or banking stability. - Some Fund arrangements have set a PC on reserve money instead of NDA; preference depends on program priorities, monetary regime, and relative importance of protecting/increasing NIR versus controlling inflation. - Money targets set as PCs should include an adjustor for changes in the reserve requirement, if applicable. - A review-based monetary policy consultation clause (MPCC) could be used to provide flexibility and incentives for developing a coherent monetary framework in countries with: - minimal fiscal dominance, - relatively low and stable inflation, - good track record of monetary policy implementation supported by central bank technical and institutional development, or - commitment to substantial strengthening of the policy framework. - MPCC features: - a quantified macroeconomic framework with quarterly or semiannual monetary aggregate or inflation targets normally within a single tolerance band assessed during program reviews; - deviations trigger consultation with the Executive Board as part of the general review process focusing on: (i) broad-based assessment of monetary stance and program track, (ii) reasons for deviations including compensating factors, and (iii) proposed remedial actions if necessary; - when consultation with the Executive Board is triggered, access to Fund resources would be interrupted until the consultation takes place and the relevant program review is completed. - Indicative monetary targets (e.g., on NDA or credit to the government) could be included to address country-specific risks such as external stability or fiscal dominance. - If the MPCC selects inflation as the central target, a narrower inner band could be used as an early-warning mechanism triggering informal consultation with Fund staff. - Monetary ceilings are not required for currency board arrangements or monetary union members; if the rules give some degree of control over credit growth, a monetary ceiling may be included. ### D. Targets for International Reserves - International reserves are normally monitored by setting a floor on official (central bank’s) net international reserves (NIR) as a PC to ensure external sustainability and safeguard Fund resources. - The PC definition should specify precise coverage of the monetary authority, particularly if broader than central bank net foreign assets on its balance sheet. - In programs where Fund disbursements are made directly to a Treasury account at the central bank (direct budget financing), a composite central bank–Treasury aggregate should be used; NIR (and NDA) measures should combine central bank and Treasury positions. - Example: if Fund disbursements are deposited to Treasury at the central bank, central bank NIR increases while composite NIR remains unchanged (central bank gross reserves increase while Treasury liabilities to the Fund increase). - Similarly, central bank NDA may decline while composite NDA remains unchanged (increased government deposits at the central bank lowering central bank NDA and increasing Treasury NDA). - NIR should include only convertible, liquid, and unpledged (unencumbered) assets that are claims on nonresidents, net of short-term foreign liabilities that are public or publicly guaranteed; outstanding stock of Fund credit is netted out. - Assets that are counterpart to foreign currency reserve requirement liabilities are often excluded from NIR since they are not usable for balance of payments purposes or under authorities’ control. - Foreign liabilities are defined as loan, deposit, swap, and forward liabilities to residents and nonresidents whose value is guaranteed in foreign currency terms (denominated or indexed). - The TMU should specify if liabilities to the participants to the SDR department are included. - Valuation effects from exchange rate or gold price changes should be excluded when defining NIR floors. - The set of exchange rates and gold valuation used for calculating NIR must be specified in the TMU. - Constant values should be used to avoid implying forecasts. - NDAs and net credit to the government should also be calculated using accounting exchange rates where foreign currency items are important and can be monitored. - Accounting exchange rates should be based on those prevailing at a recent, easily-checked date (e.g., the end of the previous year) and may be updated periodically during an arrangement. - For currency board arrangements, the monetary authority ensures maintenance of full foreign reserve backing for the currency board’s liabilities for the duration of the Fund-supported program; the PC definition should specify exact coverage of foreign reserve backing. - Floors on international reserves are not required for monetary union members. ### E. Public Debt Limits - Public debt limits in Fund-supported programs aim to prevent unsustainable debt buildup while allowing flexibility to raise financing for productive investments. - Public debt conditionality should normally be included when a member faces significant debt vulnerabilities or when debt limits are preferable or complementary to "above-the-line" fiscal conditionality. - The policy on public debt limits was last reformed in 2020 and the new guidelines became effective in June 2021. - The appropriate form of debt conditionality differs between countries using the LIC-DSF and those using the SRDSF: - For PRGT-eligible countries, debt sustainability analysis typically uses the LIC-DSF, conducted jointly by World Bank and Fund staff; assessment is informed by risk of external debt distress and, where relevant, overall risk of debt distress. - In special cases, some PRGT-eligible countries with substantial and durable market access may use the SRDSF; public debt limits for these countries would typically be established in nominal terms and could take the form of limits on total public debt or limits on sub-categories of total public debt. ### F. Payments Arrears - In cases with external or domestic payments arrears, indicative targets or performance criteria may be set for phased elimination. - The concept of government for these purposes should be clearly defined (e.g., whether state-owned enterprises or social security/pension funds are included), as should the method for measuring arrears. - Domestic arrears may present significant measurement and controllability problems that can preclude their use as performance criteria. - Judgment on whether limits on domestic arrears should be PCs or indicative targets should consider commitment control, measurement systems, and data quality. ### G. Continuous PCs - Continuous PCs always include commitments related to non-introduction of exchange restrictions and multiple currency practices. - Continuous conditionality covers: - (i) imposition or intensification of restrictions on payments and transfers for current international transactions; - (ii) introduction or modification of multiple currency practices; - (iii) conclusion of bilateral payments agreements inconsistent with Article VIII; and - (iv) imposition or intensification of import restrictions for balance of payments reasons. - These continuous PCs are always included in the text of all Fund arrangements and, being nonquantitative, are usually not listed in the PC table. - Other continuous PCs typically include non-accumulation of external payments arrears; where external debt ceilings are set at zero, these should also be specified as continuous PCs. - Staff should ascertain continuous compliance with continuous PCs based on data provided by authorities. ### H. Wage Bill Ceilings - Use of wage bill ceilings over extended periods should be avoided; application should be flexible and require clear justification in program documents. - Wage bill ceilings should be used selectively and limited to circumstances where they are short-term measures when first-best options are not available. - Medium-term expenditure frameworks and strengthened budget and payroll systems are preferable and expected to eliminate the need for wage ceilings over time. - When substantial technical assistance is needed to develop such systems, wage ceilings may be needed in exceptional cases based on macroeconomic considerations, but their need and rationale must be reassessed and justified at each program review. *Source: ppea2025010* ### 23. The purpose of adjustors is to protect the program from foreseeable shocks/developments ### 23. The purpose of adjustors is to protect the program from foreseeable shocks/developments ### Purpose and distinguishing features - Adjustors protect the program from foreseeable shocks/developments beyond the authorities’ immediate control. - They allow pre-specification of the policy response to deviations from program assumptions in a way that preserves the objective and predetermined nature of PCs applying to the disbursement of Fund resources. - The automatic nature of adjustors distinguishes them from waivers, modifications of PCs, and adjustments during program reviews. - Adjustors can be only used with PCs. ### Main principles guiding design - Use sparingly, aiming to limit the need for major policy adjustments in the face of uncertainty and volatility of key economic variables, such as export prices, foreign financing, privatization receipts, or certain policy actions (such as bank recapitalization or changes in reserve requirements). - Be simple and clearly defined, including in the TMU and PC table. - Generally used for temporary deviations or foreseeable events outside the authorities’ control; lasting or large deviations (which are likely to require changes in the policy thrust) should be addressed in program reviews. - Should be based on realistic projections; for example, where programs consistently overestimate external financing, an adjustor that allows domestic bank financing to compensate for shortfalls may yield a program that is de facto overly relaxed. ### Technical design points - By convention, adjustors are applied to ceilings/floors set for the PCs rather than to actual outturns. - If several adjustors are applied to the same PC (e.g., for deviations in foreign financing, privatization receipts, and oil prices), they should apply to the net cumulative sum of deviations from the program assumptions for these variables. - Unless the potential shock affects money demand, an adjustor on net international reserves should have a symmetric adjustor (with the opposite sign) on net domestic assets. - It is important to distinguish between project and program financing. ### Frequent applications and symmetry - Common uses include: - Deviations from projected external program grants and lending (budget/balance of payments support) leading to adjustment of the NIR floor, the NDA ceiling, and the net domestic financing of the government ceiling. - Deviations from projected external project lending leading to adjustment of the overall fiscal balance floor if applicable (whereas no adjustor is needed if the fiscal deficit concept excludes project financing and expenditures). - Deviations from projected fiscal revenues leading to (usually partial) adjustment in the overall fiscal balance floor or net domestic financing of the government ceiling. - In all cases, it is often useful to apply adjustors symmetrically and apply symmetric caps. ### Documentation and TMU requirements - The TMU should define adjustors as it defines components of PCs, including: variables subject to adjustment, explicit adjustment formulas, trigger events, caps, and thresholds. - The baseline projection for the economic indicator that gives rise to potential adjustment of PCs should be included in the PC table and a footnote should indicate the adjustor mechanism. *ppea2025010 - 23. The purpose of adjustors is to protect the program from foreseeable shocks/developments* ### 2. Under the HIPC process, which is milestones based and not timebound, a country needs to ### 2. Under the HIPC process, which is milestones based and not timebound, a country needs to ### Requirements to qualify and reach HIPC Decision Point (DP) - To reach the HIPC decision point the following conditions must be met: - The country’s debt burden indicators must be above the HIPC Initiative debt sustainability thresholds based on the data for the year immediately prior to the decision point. - The country must have established a track record of strong policy performance under a UCT-quality standard arrangement for a minimum period immediately preceding the decision point, established by practice of at least six months. An SMP can count toward the track record building if the Fund Executive Board agrees that its macroeconomic and structural policies meet the policy standards associated with programs supported by UCT arrangements. Liberia, Somalia and Sudan built the satisfactory performance under an SMP to reach the decision point. - A satisfactory poverty reduction strategy set out in a PRSP, I-PRSP, PRSP preparation status report or annual progress report (APR) must be in place and must have been issued to the IMF and WB Boards with a Joint Staff Advisory Note (JSAN) within the previous 12-18 months. - A Preliminary HIPC Document, stating that the country qualifies for HIPC DP and prepared jointly by the Fund and the WB has been discussed and approved by the Boards of both institutions. ### Interim HIPC assistance after Decision Point - After reaching decision point a country may begin receiving interim HIPC assistance subject, inter alia, to: - the existence of satisfactory participation assurances from creditors (in practice, assurances from creditors jointly holding at least 70 percent of HIPC-eligible debt); and - the requirement that the Fund-supported program remains on track in order for interim assistance to be disbursed. - Implementation status as of December 2023: - 37 HIPC-eligible countries reached completion point. - one has reached decision point in 2021 (Sudan). - the last one (Eritrea) is classified as pre-decision point. ### Requirements to reach HIPC Completion Point - There is no minimum duration for the track record required to reach the HIPC completion point, but the following conditions must be met: - The member has a stable macroeconomic position and has kept on track with its Fund-supported program. - A full PRSP must have been adopted and satisfactorily implemented for at least one year preceding the completion point, as evidenced by an APR issued to the Executive Board and subject to a JSAN. - All floating completion point triggers, the structural conditions set at the decision point, must have been implemented. - Satisfactory participation assurances from creditors (in practice, assurances from creditors jointly holding at least 80 percent of HIPC-eligible debt) should have been obtained. ### Planning, analysis, and documentation for HIPC processing - Progress under the HIPC Initiative by a country should be adequately reflected in program documents, which will contain information on: - the status of preparation or implementation of an I-PRSP/PRSP; - the implementation of the completion points triggers; - the expected timing of completion point and any obstacles toward it. - Separate documents are prepared for both the decision point and the completion point. - Preparation requires careful planning and an HIPC debt relief analysis based on a loan-by-loan data reconciliation to determine the member’s current external debt situation. This is a joint exercise among SPR and World Bank staff and, where appropriate, the relevant regional development bank, which dispatch a mission to the country to perform the data reconciliation. - The treatment of prospective debt relief may differ between the macro framework and the HIPC DRA: - The macro framework is expected to reflect realistic assumptions, including prospects for debt relief. - The HIPC DRA should reflect the legal situation regarding debt (and demonstrate the unsustainable debt burden before debt relief). ### MDRI status and contacts - The HIPC Initiative was supplemented in 2005 by the MDRI to provide additional debt relief up to 100 percent of eligible debt to qualifying countries, including HIPC-eligible countries that have reached the HIPC completion point and whose performance since reaching the completion point has not deteriorated substantially. - The MDRI is no longer an active initiative as there is currently no MDRI eligible debt outstanding and the MDRI-I and MDRI-II Trusts were accordingly liquidated in 2015. - Questions on the HIPC Initiative and the MDRI should be addressed to SPR’s Debt Policy Division. ### Appendix IV. Box 1 — Poverty Reduction Strategy (PRS) requirements specific to HIPC - At the Decision Point: - A member shall have in place a satisfactory PRS set out in an I-PRSP, a PRSP preparation status report, PRSP or an APR that has been issued to the Board normally within the previous 12 months but in any case, within the previous 18 months, and which has been analyzed in a JSAN that has also been issued to the Board. - At the Completion Point: - A member shall have in place a PRSP and implemented satisfactorily the strategy therein described for at least one year by the completion point. Evidence of satisfactory implementation should be provided in an APR that has been issued to the Executive Boards normally within the previous 12 months but in any case, within the previous 18 months and analyzed in a JSAN that has also been issued to the Board. - JSAN purpose and content: - The JSAN is prepared jointly by Bank and Fund staffs, contains an analysis of the PRS, identifies priority areas for strengthening the PRS during implementation, and should identify a limited number of priority areas expected to be addressed, including in the context of existing or possible future ECF-supported programs. - A JSAN for an I-PRSP or PRSP should end with suggested points for discussion by the Executive Boards and draw attention to: (i) priority action areas for strengthening the PRS; and (ii) areas where (a) there are inconsistencies between the PRS and its policy framework and the analytical basis that underpins Bank- and Fund-supported programs; or (b) further analysis is needed or adjustments are expected. - Issuance, Board sequencing, and publication: - PRS documents and JSANs are issued to the Executive Board after the PRS documents are officially received. Executive Board discussions at the Bank and the Fund should preferably be scheduled within five working days of each other. - The Fund’s minimum circulation period for PRS documents and JSANs is two weeks, with an additional business day required for document dissemination. - Publication of PRS documents and JSANs is voluntary but presumed; a member’s consent is required for publication. The MD will not recommend approval of an ECF arrangement or an SCF arrangement with an initial duration exceeding two years or completion of a review under such arrangement, or an HIPC decision point or completion point decision, if the member does not explicitly consent to publication of the PRS-related document. *2025 LIC FACILITIES HANDBOOK: APPENDIX IV. HIPC AND MDRI — INTERNATIONAL MONETARY FUND* ### 6. For ECF arrangements and for SCF arrangements exceeding two years, while a PRGS is ### 6. For ECF arrangements and for SCF arrangements exceeding two years, while a PRGS is ### PRGS requirement for reviews and timing - The second (and every subsequent) review can only be completed if: - (i) the member has a PRS document that has been developed and made publicly available normally within the five previous years, but no more than six years, and covers the period leading up to and covering the date of the completion of the relevant review; and - (ii) the PRS has been issued to the Executive Board as a PRGS that has been the subject of staff analysis in the staff report of a request for an ECF or SCF arrangement, or a related review. - While the PRGS is no longer required to cover the 12-month ahead for the completion of the relevant review, where the PRGS does not cover a 12-month forward-looking period, the member is expected to document in the LOI/MEFP: - (i) the procedures underway to establish a successor PRGS; and - (ii) the relevance of the current PRGS for the coming year. - For ECF arrangements and SCF arrangements with an initial duration exceeding two years, staff should inform authorities at an early stage about PRS and PRGS requirements to ensure adequate time for the PRS process. - For PRGT-eligible countries, a PRGS is encouraged under the PCI if poverty reduction is considered critical to program success. ### Preparation, cover letter, and submission - The PRGS, whether based on an existing national PRS document or newly-prepared, must be accompanied by a cover letter from the member country to the MD; the cover letter is deemed part of the PRGS issued to the Board. - Key functions of the cover letter: - (i) describe the role that the national document issued as a PRGS or a new PRGS plays in guiding the member’s PRS and the participatory process that may be reflected in the PRS; and - (ii) inform the date when the national document issued as the PRGS was publicly announced and the period it is covering. - The cover letter may be used to: - update elements of a national development plan or strategy issued as a PRGS where parts are outdated; or - include complementary analysis or information to meet the minimum standards or align with the good practice guidelines for PRGS. - If a proposed PRGS falls short of minimum standards, staff will indicate additional content needed; a newly-drafted, streamlined PRGS could be modified to cover missing content ahead of submission to the Executive Board. - If a national development plan fails to meet minimum standards, staff could: - indicate the document does not meet standards required of a PRGS and request a newly-prepared PRGS; or - ask the member to provide the “missing” elements as part of the cover letter to the MD, expanding the cover letter as necessary so the PRS documentation taken together meets the Fund’s PRS requirements. - Staff could provide good examples of PRGS produced by other members and offer comments on authorities’ drafts, but should not provide drafts for the authorities. ### Minimum standards and good practice guidance for PRGS - A PRGS or associated cover letter should include the following core elements (minimum standards—Appendix V. Box 1): - Strategy or plan: describe an overall strategy or plan for poverty reduction and growth. - Specific policy elements: describe how the strategy would be pursued through specific policies, including macroeconomic and financial policies; could include specific projects, infrastructure plans, and/or goals for public expenditure prioritization; relationship between policy elements and overall strategy should be clear. - Launch date and timeframe for implementation: define a launch date and implementation period; timing could depend on national practices; example: document could indicate effective on July 1, 2016, and covers the period 2016–2020. - Extent of participatory process: note whether a participatory process occurred and, if so, the nature of such process. - Good Practice Guidelines (Appendix V. Box 2) recommend including elements beyond minimum standards: - Existing poverty situation and trends, referencing direct and indirect measures such as household income expenditure surveys and health and social indicators. - Factors influencing poverty and bottlenecks to poverty reduction to guide strategy and policy choices. - Strategy for poverty reduction with macro-related aspects, including approaches to foster sustained, strong growth and policies to ensure inclusive income growth (e.g., safety nets, better targeting). - Specific policies documenting intended policies and targeted impacts, priorities for public spending (health, education), financial inclusion plans, measures to reduce impediments to investment and job creation, institutional capacity building, technical assistance needs, and donor coordination. - Fiscal and debt framework: prioritize development spending based on realistic assessment of fiscal space; priorities should serve as basis for priority social spending and indicative targets in LOI/MEFP; discuss financing impact on debt strategy. - Spending effectiveness: mention steps to strengthen efficiency and value for money in public spending programs. - Safety nets and risk mitigation: discuss steps to mitigate negative spillovers and risks from adjustment policies and external shocks (e.g., social safety nets, food security arrangements). - Participatory process: strongly encourage seeking CSO inputs during PRGS preparation; authorities are responsible for consultation levels needed for broad ownership. ### Participatory processes, Bank assessment letter, and PRS implementation reporting - Participatory processes are strongly encouraged but not required; PRGS must clarify the extent and nature of any participatory process. - An assessment letter from Bank staff must be requested when a PRGS is received by IMF staff; the assessment letter: - provides Bank staff’s perspective on strengths and weaknesses of the member’s strategy and identifies priority action areas and risks for implementation; - should be requested at the time a PRGS is received by IMF staff and, following clearance by Bank management, will be circulated to the Fund Board at the same time as the PRGS to help inform the Board on PRS quality; - will not be published by the Fund. - Staff is expected to report to the Board on implementation of the PRS through regular reporting and periodic in-depth analysis; staff reports should include developments in implementation of policies supporting the PRS, such as prioritization of resources in the annual budget, budget outturns, adoption of social safety nets, and progress in growth-promoting reforms. - A Poverty Reduction Strategy Implementation Review (PIR) is expected to be conducted by the time of the fifth review under the ECF or under SCF arrangements with an initial duration exceeding two years (i.e., once for any given ECF or SCF arrangement). - PIR is not mandatory for ECF and SCF decisions, but is a good practice; outcome is documented in the staff report. - PIR is expected to cover: (i) performance relative to PRS benchmarks and monitoring indicators; (ii) observed linkages between PRS and national systems and processes (e.g., budget monitoring and planning); and (iii) the coming year’s policy intentions, particularly as reflected in the budget. - PIR could be encouraged independent of a Fund program, such as in Fund surveillance activities. ### Safeguards, issuance, publication, and HIPC note - Under all Fund facilities for LICs, social and other priority spending should be safeguarded and, whenever appropriate, increased; this should be monitored through explicit targets, typically an indicative floor on social or other priority spending, whenever possible. - Determination of social or other priority spending should in general be based on the authorities’ PRS or, where that does not exist, the medium-term poverty reduction and growth objectives and policies outlined by the authorities. - Where tracking is not feasible, members will be encouraged to develop adequate expenditure tracking systems, which may require technical assistance. - PRGS’ are not distributed in paper format; they are registered by SEC as official Board documents and made available to Executive Directors via posting to IMF Connect, with Executive Directors and designated member authorities notified by email of newly posted documents; posting constitutes “issuance” to the IMF Board for PRS requirements for ECF and SCF arrangements. - Publication of PRS documents is voluntary but presumed; member consent is required for publication. - The MD will not recommend approval of an ECF or SCF arrangement or completion of a review if the member does not explicitly consent to publication of the PRS-related document. - Staff should discuss publication intention during mission and obtain explicit consent prior to submitting UFR documents to management for clearance; the management clearance note should state that authorities have consented to publication, satisfying Transparency Policy requirements. - When consent is received, SEC’s transmittal memo should indicate this; PRSPs, APRs and PRGS’ may be published immediately after formal transmission to the Bank and/or the Fund when circulated for information. - HIPC Initiative: remaining eligible countries must continue to document their PRS in line with PRS documentation requirements under the HIPC Initiative to reach decision and completion points. *Source: 2025 LIC FACILITIES HANDBOOK: APPENDIX V. POVERTY REDUCTION OBJECTIVES UNDER THE IMF LIC FACILITIES* ### 5. The sovereign has the capacity to access international financial markets on a durable ### ppea2025010 - 5. The sovereign has the capacity to access international financial markets on a durable ### Market-access criterion: qualifying tests - The sovereign has the capacity to access international financial markets on a durable and substantial basis, as measured by one of the following two tests: - Public sector issuance or guaranteeing of external bonds or by disbursements under public and publicly guaranteed external commercial loans in international markets during at least three of the last five years for which data are available, in a cumulative amount over that period equivalent to at least 50 percent of the country’s quota at the Fund at the time of the assessment.2 - External bonds and commercial loans issued or contracted in markets that are not integrated with broader international markets do not qualify, including loans or bonds subsidized or guaranteed (partially or fully) by official external entities (including foreign governments and foreign public sector entities as well as international organizations), and loans from foreign state-owned banks.3 - If the amount of issuance or guarantee of external bonds and of disbursements under external commercial loans in a single year for which qualifying data are available totals less than two percent of the member’s quota at the time of the assessment, then that year shall not count towards meeting the graduation duration threshold. If the member’s quota increase under the Fourteenth General Review of Quotas (GRQ) has not become effective, then the cumulative amount is at least 100 percent of quota. When the member’s quota increases under the 16th GRQ becomes effective the cumulative amount of “at least 50 percent of quota” will be reduced to “at least 35 percent of quota” and the de minimis threshold of “less than two percent of the member’s quota” will be reduced to “less than 1.5 percent of the member’s quota”. - Convincing evidence that the sovereign could have tapped international markets on a durable and substantial basis, even though the scale or duration of actual public-sector borrowing fell short of the specified thresholds.4 - Both tests take into account bonds/loans issued, contracted, or guaranteed by non-sovereign public-sector debtors where such a debtor’s ability to access international markets is assessed to be an indicator of the sovereign’s creditworthiness.5 ### Safeguards and additional eligibility conditions for graduation under market access - Countries are considered candidates for graduation under the market access criterion only if: - their annual per capita GNI is above the IDA operational cutoff based on the latest qualifying annual data; and - their annual per capita GNI has not been on a declining trend during the last five years for which qualifying data are available (comparing the first and last relevant annual data). - Further clarifications and definitions (public sector, external bonds, external commercial loans, data sources, and definition of borrowing on international financial markets) are provided in Decision No. 14521-(10/3), as amended, IMF 2020a, and IMF, 2024e.4 - Borrowing by a public corporation will generally not be assessed as an indicator of the sovereign’s creditworthiness where such borrowing is based on the public corporation’s own balance sheet (including by collateralizing its own assets) and is not guaranteed by the sovereign.5 ### Absence of serious short-term vulnerabilities - In addition to meeting the income and/or market access criteria, the country should not face serious short-term vulnerabilities. The assessment requires: - absence of risks of a sharp decline in income or of a loss of market access; - limited debt vulnerabilities as indicated by the latest Debt Sustainability Analysis (DSA); - confirmation that overall debt vulnerabilities have remained limited since the most recent DSA was conducted. ### Graduation timing and arrangements - Once the Executive Board takes the decision to graduate a member from the PRGT-eligibility list, the decision becomes effective five months later. - Any arrangement in which the country is engaged under the PRGT at the time of the Executive Board decision may continue until its expiration. - Such an arrangement may be extended or access under it may be augmented as appropriate under the existing policies and guidance (Decision 14251-(10/3) as amended). --- ### Appendix VII — Catastrophe Containment and Relief Trust (CCRT): purpose and structure - Purpose: - Established in 2015 to provide grants to pay debt service owed to the IMF for eligible low-income countries hit by catastrophic natural disasters (earthquakes) or fast-spreading public health disasters (epidemics or global pandemics) with international spillover potential. - March 2020 reform expanded qualification criteria to include life-threatening global pandemics inflicting severe economic disruptions across the Fund’s membership and creating BoP needs warranting a concerted international effort. - Builds on the Post Catastrophe Debt Relief (PCDR) Trust (established 2010). - Eligibility: - Restricted to PRGT-eligible countries which have either a per capita GNI below the IDA operational cut-off or qualify as a small country (population below 1.5 million) and a GNI per capita income less than twice the IDA operational cut-off. - As of July 1, 2024, the IDA operational cut-off is US$1,355 for GNI per capita.5 - Two windows with different purposes, qualification criteria, and assistance terms: - Post-Catastrophe Relief (PCR) window. - Catastrophe Containment (CC) window. - Assistance is not provided on debt scheduled to be repaid with assistance of other debt relief trusts administered by the IMF or via the other window of the CCRT; provision is conditional upon availability of CCRT resources at the time of the decision. ### PCR (Post-Catastrophe Relief) window: key conditions and terms - Qualification criteria for catastrophic natural disaster: - directly affected normally at least one-third of the population; and - destroyed more than one-quarter of the country’s productive capacity, as estimated by early indications such as destroyed structures and impact on key economic sectors and public institutions, or caused damage deemed to exceed 100 percent of GDP prior to the qualifying catastrophic disaster. - Flow relief: - Temporary debt flow relief on Fund debt service (principal and interest) falling due from the date of the debt relief decision to the second anniversary after the occurrence of the disaster. - Relief applies to debt outstanding at the time of the disaster (on which regular scheduled debt service payments were made before the disaster) plus any IMF disbursement made normally within four months following the disaster. - Stock relief: - Full cancellation of a country’s stock of debt to the IMF is possible in more severe cases where recovery-related BoP needs are substantial and protracted. - Stock relief can be considered when: (i) the disaster has created or exacerbated substantial and protracted BoP needs expected to persist beyond the flow relief period; and (ii) resources freed by debt stock relief are critical for meeting these needs. - Decision could be made at any point in the period from six to 24 months following the disaster and based on assessments including an updated DSA. - Debt stock relief requires: (i) a concerted international effort with assurances of similar debt relief from other official sector creditors whose debts account for at least eighty percent of the member’s total sovereign external debt outstanding to official creditors (less amounts due to the Fund) at the time of the disaster; (ii) member assurances to cooperate and refrain from inappropriate policies; and (iii) a track record of adequate macroeconomic policies normally for at least six months immediately preceding the decision. - The eligible debt stock is the debt outstanding on the second anniversary of the disaster or on the date of the IMF decision to disburse debt stock relief, whichever is later. ### CC (Catastrophe Containment) window: key conditions and terms - Intended for immediate debt relief for upcoming IMF debt service falling due within up to two years to eligible low-income members that the Executive Board determines: - are experiencing a balance of payments need arising from a qualifying public health disaster (QPHD) defined as: - a life-threatening epidemic with sustained presence spread across several areas, causing significant economic disruption and creating a BoP need, with capacity to spread to other countries, and characterized by at least either: (i) a cumulative loss of real GDP of 10 percent; or (ii) a cumulative loss of revenue and increase of expenditures equivalent to at least 10 percent of GDP (measured relative to staff estimates made prior to the disaster); or - a life-threatening global pandemic (informed by WHO assessment) inflicting severe economic disruption across the Fund’s membership and creating BoP needs on such a scale to warrant a concerted international effort. - and have in place an appropriate macroeconomic policy framework to address the BoP need and policy response. - Assistance mechanics: - Eligible members receive immediate debt relief covering eligible debt service falling due to the Fund under an initial tranche not exceeding six months from the date of the qualification decision (with respect to (i)) or from the date of the Executive Board determination that a global pandemic exists (with respect to (ii)). - Member must provide a letter of intent explaining the public health disaster, the BoP needs created, containment measures (including budget reallocations), and macroeconomic policies to address BoP problems. - Grants pay off upcoming IMF debt service on eligible debt outstanding on the date of the decision, which is not in arrears. - Grants are provided in tranches: initial tranche covering eligible debt due within six months; approval of additional tranches during the two-year period is subject to availability of CCRT resources and likely need of other potentially qualifying members. - Historical note: - Assistance to the three Ebola-affected countries (Guinea, Liberia, and Sierra Leone) via the CC window was provided in February—March 2015 in the total amount of SDR 68 million (equivalent to US$95.5 million).6 *International Monetary Fund — 2025 LIC Facilities Handbook: Appendix VI–VIII (excerpts).* ### 2. Norms are used to: help guide access and ensure PRGT self-sustainability. In cases ### ppea2025010 - 2. Norms are used to: help guide access and ensure PRGT self-sustainability. In cases where it is difficult to accurately assess the balance of payments need ### Purpose and role of access norms - Norms guide access decisions when it is difficult to accurately assess balance of payments (BoP) needs. - Norms help ensure PRGT self-sustainability by informing calculations to estimate the self-sustained annual level of concessional lending from PRGT. - It is important that average access at the norm will not pose risks to the robustness of PRGT self-sustainability for projected demand (expressed as a percent of eligible members seeking Fund support) under a range of plausible circumstances. ### History of the norm - Norms were introduced in 1987 under the Enhanced Structural Adjustment Facility (ESAF) to guide access decisions for LICs’ protracted BoP problems. - The de facto ESAF “norm” was set so that ESAF resources would be exhausted if all eligible members met residual BoP needs with loans not exceeding the limit, and with an average access level of 150 percent of quota. - Access norms have been adjusted multiple times to reflect shifts in global economic conditions, the evolving architecture of Fund concessional support to LICs, and outcomes of the General Reviews of Quotas. - Adjustments have generally aligned norms (and limits) with aggregated metrics of need (GDP, trade) for members eligible for concessional financing. ### Key adjustments and features over time - 1999: Tapering norms introduced for repeated use of the PRGF as its usage became more frequent. - 2009 reforms: Streamlined the number of norms to two thresholds depending on the amount of credit outstanding. - 2019 reform: Increased access norm for (low and high access) by one-third and introduced an annual RCF access norm at 25 percent of quota. - 2021 reform: Simplified access norms, with a unified access norm set at 145 percent of quota for any three-year ECF arrangement. - December 2023: Access norm temporarily raised to 200 percent of quota until end-2024. - October 2024 (effective January 1, 2025): Access norm reverted to 145 percent of quota (100 percent of quota when the general conditions for effectiveness of the 16th GRQ increases are met). - ECF arrangements longer than 3 years: Access norm based on the length of the arrangement and the annual access norm under the three-year ECF. - SCF arrangements: Norm for access under an 18-month SCF set equal to that of the 3-year ECF arrangement, varying proportionately with length, up to the amount allowable under a 2-year SCF arrangement: - 193.33 percent of quota (general case) - 133.33 percent of quota (when the general conditions for effectiveness of the 16th GRQ increases are met) ### Evolution of tiering and credit-outstanding links - 1999: Tiered system introduced for first- and second-time users with lower access norms for successive arrangements. - 2004: PRGF access norm tiering extended for third and subsequent arrangements (up to the sixth), with further tapering. - 2009 (creation of PRGT): Reform reduced operational complexity to two tiers based on credit outstanding. - Prior to 2021 reform, access norms were linked to initial stock of credit outstanding: - 120 percent of quota for a 3-year ECF when credit outstanding is below 100 percent of quota - 75 percent of quota when credit is between 100 and 200 percent of quota - Undefined if outstanding credit exceeds 200 percent of quota ### Documentation and review process (Appendix IX) — major steps and requirements - The Fund’s interdepartmental review process applies to country work documents (Policy Notes (PN), Staff Reports, LOI/MEFP/TMU, EAP-related documents, Assessment letters, etc.). Area departments and SPR have joint responsibility for clearance; LEG and FIN are involved; other functional departments follow review-on-demand. - Pre-mission: Area departments prepare a PN with stages including (i) early consultation; (ii) formal interdepartmental review; (iii) policy consultation meeting (PCM); (iv) SPR clearance of revised PN and cover note to management; and (v) management clearance. - Early consultation: Teams are encouraged to engage informally with SPR and relevant departments (notably FIN or LEG) early to identify policy lines, expedited deadlines, and use of Lapse-of-Time procedures. Early consultation is required for complex cases (e.g., combined program/RSF requests, some exceptional access cases, cases involving debt treatments). - PN content should include: - Background diagnostics (including recent developments) - Economic outlook - Staff’s and authorities’ positions on key policy issues - Program objectives and design, including safeguards and modalities for financing, and tables on program conditionality where relevant - Risks and mitigation measures - Capacity to Repay the Fund (CtR) paragraph with bottom-line assessment and references to CtR metrics - Standard macroeconomic tables (selected economic indicators; government accounts in national currency and percent of GDP; monetary survey; balance of payments) - Program tables: quantitative conditionality (PC table), structural benchmark table, schedule of disbursements and reviews, financing requirements and sources, and member’s capacity to repay the Fund - Submission and attachments: - Area departments should submit draft DSA where required; DSA should be attached to the PN when required. - Background appendices encouraged (analytical underpinnings, exchange rate assessment, HIPC/MDRI issues, etc.). - Length and circulation: - Full PN typically three–four pages of text for departmental review; shortened PN acceptable for follow-up missions with updates. - Briefs normally expected for staff visits; PCMs optional for briefs but consultation with SPR encouraged. - Policy Consultation Meetings (PCM): - Held approximately two to three weeks prior to missions. - Aim to establish firm idea of final PN, discuss issues, and ideally reach agreement. - Review departments should ensure relevant representatives attend. - Functional departments may send technical experts. - Clearance and cover memorandum: - SPR clears revised PN and prepares cover memorandum for management, highlighting key issues, staff recommendations, main issues raised in review process, and controversial aspects; the cover memorandum should clarify requested management action. - Management clearance: Management provides written clearance and guidance; authoring departments must address Management’s comments. If a document is not cleared, Management will indicate a course of action. - Significant updates after Management clearance require SPR review before seeking management clearance; consider using a PN Update when needed. - On mission (LOI/MEFP): - LOI/MEFP required for new financing/arrangements and program reviews; LOI must be signed by representatives responsible for policy commitments (standard practice: minister of finance and governor of central bank, with exceptions for currency unions). - LOI/MEFP usually include a table with quantitative performance criteria covering next 12 months, indicative targets through end of relevant year, and structural benchmark table covering next 12 months. - LOI should include consultation clause and specify how program advances poverty reduction and growth objectives; authorities advised not to sign LOI prior to management approval (LOI signed ad referendum). *2025 LIC FACILITIES HANDBOOK: APPENDIX VIII. ACCESS NORMS—HISTORY AND KEY FACTS; APPENDIX IX. DOCUMENTATION AND REVIEW PROCESS* ### 14. Technical Memorandum of Understanding (TMU): For new arrangement/financing/ ### 14. Technical Memorandum of Understanding (TMU): For new arrangement/financing/ ### TMU and accompanying documentation - For new arrangement/financing/instrument requests, the LOI/MEFP must be accompanied by a TMU that clearly and precisely defines the PCs under the program, including: - definitions of indicators, - the coverage of government and the monetary authorities, - exchange rate valuation for program purposes, - program adjustors, - data submission requirements, etc. - Standard language on the definition for external debt should also be included. ### Side letters - Use of side letters in PRGT programs and financing requests has been extremely rare. - Side letters may be used when release of information on policy understandings at the time of an emergency financing request or a request for financing or non-financing arrangement or review would: - cause adverse market reaction, or - undermine the authorities’ efforts to prepare the domestic groundwork for a measure. ### Concluding Statement - Mission Concluding Statements: - summarize discussions between country authorities and an IMF staff team, - are not negotiated documents, though drafts are typically shared with country authorities as a courtesy, - can be posted on the IMF website with the consent of country authorities. - For Article IV missions, it is standard practice for teams to leave a Concluding Statement with the authorities. - Use cases: - sometimes useful in missions that do not result in understandings on a new financing/arrangement/instrument request or program review. - Consultation and clearance: - If the concluding statement would deviate significantly from the PN, consultation should occur before it is issued. - If staff wish to deviate significantly from management-approved lines in the Concluding Statement, they should seek a renewed clearance from SPR, whereby SPR would consult with relevant departments as needed. - In some cases, an Update of the PN would be required. ### End-of-mission Press Release - Often useful when understandings on a new arrangement/financing/instrument request or program review are reached. - Purposes: - focus local media and stakeholders on main policy issues, - build understanding for the role of the Fund in the country. - Process: - Staff should inform the authorities of their intention to issue a press statement. - Missions are encouraged to inform the COM country press officer or Media Relations of press plans and should clear the written statement before its release. - The mission should give the authorities an opportunity to review the draft press statement. - Publishing note: - Preferable to publish either a concluding statement or a press release at the end of a staff mission, but not both. - A press release may be warranted in addition to a concluding statement when the authorities may not have taken a decision on publication of the concluding statement at the time of the mission ending. ### D. Post-Mission Work — Back-to-Office Report (BTO) - The mission chief should send a back-to-office report (BTO) to management within two working days of the mission's return to headquarters. - The BTO should be short (up to two pages) and should mention: - the nature of the mission (with mission members listed in a footnote), - the key issues, - an attached Selected Economic Indicators table. ### Staff Report: scope and requirements - A staff report is required for: - an Article IV consultation, - initial arrangement (financing or non-financing instrument) request, - at the time of each program review. - This includes the ECF, SCF, RCF, PCI, and SMP/PMB. - Short staff reports to the Board are required where program design is modified between reviews (e.g., modification of PCs, short-term extension of arrangements, augmentation requests at ad hoc reviews). - All such staff reports should include: - (i) background diagnostics (including recent economic and political developments), - (ii) the economic outlook, including downside risks and debt vulnerabilities (referring to the most recent DSA), - (iii) the authorities’ policy objectives and plans, - (iv) capacity to repay with a bottom line assessment and references to metrics in the CtR table and/or to metrics included in cross country CtR charts when applicable, - (v) a staff appraisal of the key policy issues. - Where applicable, staff appraisals should make recommendations for approvals of requests for: - (i) waivers for non-observance of PCs, - (ii) extension of arrangement, - (iii) augmentation, - (iv) rephasing, - (v) modification of existing PCs, - providing justification that builds on material in the main body of the report to support the recommendation. - Any combined UFR and Article IV staff report should meet the same Article IV requirements as for members without Fund-supported programs. - Staff reports for members subject to safeguards assessments and monitoring should include a summary safeguards paragraph in the main body of the report covering: - the status of the safeguards issues, - any significant recommendations on legislative amendments that involve parties external to the central bank, - problems in obtaining access to data, - deviations from commitments relating to safeguards recommendations. - A Data Issues Annex should be included at least for Article IV Staff Reports. ### Country documents for ECF, SCF, RCF initial requests - Should set out overall program objectives and specific policy understandings. - Staff reports should explain: - the choice of instrument, - the determination and phasing of access, - the design of conditionality. - All program staff reports, both initial requests and reviews, should discuss key near-term policy goals and commitments (typically over the next 12 months), and program financing. - Staff reports for program reviews should also discuss performance relative to program conditionality. ### Required macroeconomic tables and program tables - Staff reports should contain a full set of macroeconomic tables, including: - (i) selected economic indicators; - (ii) government accounts (in national currency and percent of GDP); - (iii) monetary survey (central bank accounts and commercial bank accounts); - (d) the balance of payments. - A standard table on Sustainable Development Goals (SDG) indicators is not a requirement but is encouraged if relevant about once a year. - Staff report tables for arrangements/instruments/financing requests or reviews should also include: - (i) the approved and proposed schedule of disbursements and reviews, - (ii) financing requirements and sources, - and, in the case of new financing requests or augmentations, or if the macroeconomic environment has changed significantly, (ii) the member’s capacity to repay the Fund. - The staff report should include staff’s qualitative assessment of the member’s capacity to repay the Fund. ### LOI/MEFP content requirements - The LOI/MEFP attached to arrangements/instruments/financing requests or reviews should include: - (i) a table with quantitative conditionality (the “PC table”) that covers: - (a) previously established targets and outturns (PCs and indicative targets) over at least the past 12 months—alternatively, reporting on past performance relative to quantitative targets can be included as a separate table in the staff report, - (b) PCs established for the next 12 months (from the expected Board date), - (c) indicative targets through the end of the calendar year (or fiscal year) for which policies are being discussed; - (ii) a structural benchmark table covering: - (a) the implementation status of previously established benchmarks—alternatively, reporting on the status of previously established structural benchmarks can be included as a separate table in the staff report, - (b) benchmarks covering the next 12 months, highlighting their timing and criticality. ### Management Clearance Memo - Management clearance of staff reports is based on a clearance note that: - states the main issues addressed in the report, - clearly lays out any differences in views among reviewing departments, - explains clearly any significant deviations from the PN, - highlights potentially controversial issues. - A copy of the staff report’s Executive Summary should be attached. ### Joint Bank-Fund Debt Sustainability Framework Analysis (DSF) - The Guidance Note on the Bank-Fund Debt Sustainability Framework for Low Income Countries discusses the criteria for DSA preparation and content. - A LIC DSA should be prepared once a year for PRGT-eligible countries that also have access to IDA resources. - A DSA may also be required to support the proposed level of access. - DSAs should be prepared as self-contained documents, normally issued as a supplement to staff reports, and should include a clear description of macroeconomic assumptions without referring to the Fund staff report. - The main conclusions of the DSA should be discussed in the body of the staff report. - The DSA is subject to the same review process as a staff report and, when finalized, if not published as a stand-alone document, should be included as a supplement to the staff report. - Final versions of the DSA files (external and fiscal templates) should be submitted to the SPR review box at the time the DSA (and staff report) is sent to the Board. - All DSAs must be prepared jointly by the IMF and World Bank and must be submitted to both the IMF’s and World Bank Executive Boards. ### Informational Annex - An informational annex should be issued as a supplement to ECF, SCF, RCF, PCI, and SMP requests, and Article IV reports. - This annex comprises: - Relations with the Fund and Bank-Fund Collaboration, including the JMAP matrix, - Relations with other Multilateral Institutions if applicable. - The annex: - is subject to departmental review but does not require management clearance, - should be sent for interdepartmental review together with the report for which clearance is sought but is cleared only by the Authoring Department (not SPR), - should be sent to Management for information along with the staff report for which clearance is sought, - should not be attached to the staff report; at the time of issuance of the staff report to the Board, the annex should be sent to Secretary’s Department (SEC) and posted on the web as a supplement to the staff report. - A Data Issues Annex should be included at least for Article IV Staff Reports. - The annex is subject to departmental and management review. ### Summing Up and Chairman’s Statement - Prepared and cleared by Authoring Departments; teams are encouraged to share these documents with SPR and other relevant departments for optional comments. - All stand-alone UFR discussions and combined UFR with Article IV discussions require both a Summing Up and Chairman's Statement. - Summings Up: - read out for directors' comments at the conclusion of the Board meeting, - should summarize issues clearly and avoid overly long or complex sentences, long lists of topics, measures, or acronyms that are not widely known or previously defined, - for a combined UFR with Article IV discussions, contains a section on key policy issues discussed in the context of the Article IV consultation followed by a separate short section at the end on key program issues (only the latter section is required for a standalone UFR discussion), - should cover core areas: recent economic performance or performance under the program, the economic outlook, risks and challenges, and macroeconomic and structural policy issues, - should have a clear forward-looking element and, for a country with a Fund-supported program, include what directors consider the most critical elements for the success of the program. - Chairman's Statements: - prepared after the Executive Board adopts a decision regarding a country's use of Fund resources or completes a discussion about a country's participation in the HIPC initiative or a country's PRS-related document, - intended to inform the public of the Board's decision on UFR and the Board's overall policy message, - should convey a few (three to four) points on which the Board placed emphasis and should not attempt to cover the discussion as a whole or reflect divergent Directors' views, - should not attribute statements to directors. - Caution: Staff should exercise caution when referring to highly market-sensitive issues. ### Press Release responsibilities - COM issues Press Releases for new financing requests and program reviews, containing the Chairman’s statements. - Area Departments prepare the background section, to be reviewed by SPR upon demand. - COM prepares the initial draft, including the Chairman’s statement, and requests comments from the area department, LEG, FIN, and the executive director of the country in question. - Note: Public Information Notices (PINs) ceased on July 2013 and have been consolidated into the Press Releases series. ### Staff Statements and Supplements - Prepared as needed if new or additional information becomes available after submission of the staff report to the Board and before the Board meeting. - The statement should explicitly mention whether the new information changes the thrust of staff’s assessment in the staff report. - If there are significant changes, a staff supplement should be issued. - Statements and supplements should be sent to SPR for clearance. - Supplements should also be reviewed by LEG and relevant Functional Departments if they require Management clearance. - Staff statements and supplements that alter the thrust of the staff appraisal, contain a revised proposed decision, report on whether a PA has been met or not, contain a supplementary or revised LOI, or provide new information critical to the enterprise risk assessment require Management clearance. - Authoring Departments should consult with SPR as to whether a statement/supplement should be sent to management for information or clearance. - Timing: They should be sent to management for their information and to SEC for Board circulation, at least four days before the Board meeting for statements and at least three days before the Board meeting for supplements. ### Selected Issues Papers (SIPs) - An interdepartmental review is not required for SIPs as they generally do not contain policy advice. - Best practice is to include SIPs for information in the package sent to departments for review. - Any SIP that contains policy advice that deviates from the staff report or introduces new elements on broader Fund policies should be reviewed by relevant departments. - SIPs do not require Management clearance. - A near-final draft should be submitted to Management for information along with the staff report for which clearance is sought. ### Review Process for Staff Reports - Broadly adheres to the same guidelines for formal inter-departmental review as applicable at the PN stage. - Key points: - authoring departments need to adhere to the submission of documents as a complete package; - reviewing departments should not reopen policy positions or other points that were in the previously approved PN, absent new information that warrants a change. - If issues arise after management has provided clearance but before the paper is issued to the Board, authoring departments should clear any required modifications (aside from typos and minor edits) through the relevant OMD advisor, after having reached agreement (in cases of country papers) with SPR. *Source: 2025 LIC FACILITIES HANDBOOK: DOCUMENTATION AND REVIEW PROCESS — Appendix IX (selected sections).* ### 32. There is a fast-track process for program documents. Fast-track procedures are not ### ppea2025010 - 32. There is a fast-track process for program documents. Fast-track procedures are not ### Fast-track process, crisis, and complex-case modalities (paras 32–34) - Fast-track availability: - Fast-track procedures are not available for UFR/RSF/PCI/PMB/SMP requests. - Fast-track procedures can be considered for UFR reviews or RFI/RCF requests. - The fast-track allows for a simplified review process and is applicable in specific circumstances. - Pre-mission and post-mission submissions under fast-track: - Prior to the mission, the team would submit for the interdepartmental review process and management clearance: - (i) a short PN (or extended cover note) with a narrative and a summary of the review process; and - (ii) a draft staff report. - Post-mission, a red-lined version of the staff report would be submitted for review. - Reviewing departments would then focus their comments on the changes introduced to the draft staff report after the mission. - Governance of the fast-track choice: - The choice of countries for a fast-track approach is for area departments to make in consultation with SPR and should be exercised judiciously. - Crisis cases (para 33): - A crisis is generally understood as involving an extremely time-sensitive need for Fund support, where major or critical enterprise risks are judged to arise. - Area departments should inform SPR as soon as possible of any crisis that requires shortening the review deadlines. - If SPR is of the view that more time is required, then management should be consulted. - To ensure quality control and mitigate enterprise risk, area departments should alert all reviewing departments, including ORM and COM, to the use of flexible modalities and initiate a preliminary exchange of views on policy lines (“early engagement”) before the formal review process starts. - Exceptionally complex cases (para 34): - Examples include requests submitted simultaneously or with high overlap and involving two or more key elements (e.g., combined program/RST requests, some PNs for exceptional access, and some cases involving debt treatments). - Early engagement is required. - Cases involving debt treatments may require considerable guidance about applicable policy provisions and extra attention to the DSA (and the debt targets set). - Reviewing departments should aim to prioritize comments, and keep them constructive, tailored, and consistent. - Review times need to be extended for both reviewing departments and management wherever feasible, and allowance should be made for longer PCMs in anticipation of more priority issues to discuss. ### Other documents: requirements, review, and modalities (paras 35–47) - Staff Statements for UFR (‘concise note’) with Preliminary Evaluation of Exceptional Access (para 35): - This “EA note” should be submitted as a package with the PN for interdepartmental review. - The review should follow the standard process for PNs. - The request should be for clearance of the staff statement (for circulation to the Board), with clearance of the Policy Note requested after the informal consultation with the Board. - Assessment of the Risks to the Fund and the Fund’s Liquidity Position (para 36): - Prepared by FIN and SPR. - Should be submitted to the authoring department of the relevant country report for review, and to other departments as needed. - Board Briefings in the context of Excessively Delayed Article IVs (para 37): - Part of the Fund’s surveillance policies. - Should be reviewed by SPR and LEG, and FDs, under the standard provisions of the interdepartmental review process. - Require Management clearance. - Authoring Department Regional Briefings to the Executive Board (para 38): - Generally not subject to the interdepartmental review process. - Cleared by the authoring department Director and do not require Management clearance. - Exceptions apply where material is otherwise subject to interdepartmental review (e.g., excessively delayed Article IV material). - Regional Briefings should be shared with reviewing departments and Management for information three days ahead of issuance to the Executive Board. - Ex-Post Peer Reviewed Assessment (EPA) for LTPE members (para 39): - Required for all members considered as having LTPE, defined as having in place a Fund-supported financial arrangement for at least seven of the past 10 years. - Time spent under the PCI and arrangements treated as precautionary do not count towards LTPE. - For members meeting the LTPE definition and without an EPA or ex post peer review assessment in the past five years, ex post peer review assessments should be prepared if a successor arrangement is contemplated and be considered by the Board at the time of a request for a new arrangement. - Staff should conduct an ex post peer review assessment at the beginning of the successor program negotiation or during the Article IV consultation, whichever is earlier, and incorporate its lessons in the new program design. - Staff should circulate the draft assessment report to departments together with the PN for discussion of a successor arrangement or with the PN for the Article IV consultation, whichever is earlier. - Ex post peer review assessments should be presented to the Executive Board for consideration as part of the staff report for request of a new program (i.e., as an annex or in the main text of the report). - Joint Bank-Fund LIC DSA (para 40): - Should be prepared annually for PRGT-eligible countries with access to IDA resources. - The Guidance Note on the Bank-Fund Debt Sustainability Framework for Low Income Countries (IMF, 2018b) discusses criteria for DSA preparation and content. - A LIC DSA should be prepared once a year for PRGT-eligible countries that also have access to IDA resources. - A DSA may also be required to support the access level (see Section D of the Handbook Chapters on the ECF, SCF, and RCF). - DSAs should be prepared as self-contained documents, normally issued as a supplement to staff reports, and should include a clear description of macroeconomic assumptions without referring to the Fund staff report to which they are a supplement. - The main conclusions of the DSA should be discussed in the body of the staff report. - The DSA is subject to the same review process as a staff report and, when finalized, if not published as a stand-alone document, should be included as a supplement to the staff report. - The final versions of the DSA files (external and fiscal templates) should be submitted to the SPR review box at the time the DSA (and staff report) is sent to the Board. - All DSAs must be prepared jointly by the IMF and World Bank and must be submitted to both the IMF’s and World Bank Executive Boards, be it for discussion or for information. - PRS documentation (PRGS) (para 41): - For ECF and SCF arrangements with an initial duration exceeding two years, a PRGS is required to be issued to the Board for completion of the second and subsequent reviews. - The PRS covered in the PRGS must have been developed normally within five years but no more than six years leading up to and covering the relevant review. - An assessment of the country’s PRS has to be requested from World Bank staff and circulated to the Fund Executive Board for information. - Joint Management Action Plan (JMAP) (para 42): - Bank and Fund country teams document results of an annual consultation in a joint memorandum for files identifying: - (i) the key macroeconomic and macro-critical structural challenges facing the country; - (ii) policies and reforms to address these challenges and each institution’s priorities for supporting these reforms; - (iii) respective work plans and outputs for the next 12 to 24 months, together with tentative mission schedules and delivery dates (summarized in an “action matrix” appended to the memorandum); - (iv) information, analytical cross support, and other inputs needed from institutional counterparts, including agreed delivery dates; and - (v) any substantive disagreement on any of the above issues. - When a Fund team prepares a staff report, it is expected to document Bank-Fund Collaboration in the appendix to the staff report; to avoid duplication, the appendix can be a reformatted version of the memorandum. - Review of Joint Fund-Bank Documents (para 43): - Staff of both institutions should communicate at the outset to discuss respective review requirements and agree on a coordinated timetable for all joint documents that require review by both institutions and consideration by the Boards. - Assessment Letters (para 44): - Typically produced in response to requests from multilateral or bilateral donors or creditors, in particular, the World Bank and other multilateral institutions, though requests may come from the member country. - Should contain a clear and candid assessment of the member’s macroeconomic conditions and prospects, and of macroeconomic and related structural policies; specifically: - (i) identify existing macroeconomic imbalances and structural distortions; - (ii) indicate to what extent current and planned policies are dealing with (or perhaps contributing to) these imbalances and distortions; and - (iii) highlight policy areas where there are major outstanding concerns. - To the extent possible, Assessment Letters should be derived from and consistent with the most recently available report (PNs, staff reports, etc.). - Should contain an account of the Fund’s relations with the member country, including, where relevant, program discussions. - May not include language directly encouraging or discouraging assistance from donors. - Assessment Letters are subject to the same SPR review and clearance procedures as program-related documents, and they require management approval. - Circulation to the Board for information is required at the time of external dissemination. - Assessment Letters are reviewed by SPR, with other departments copied for information, following standard review procedures. - Although not generally done, Assessment Letters may be published on the IMF's external website or by the recipient institutions, only with the consent of the authorities. - HIPC Documents (para 45): - If a country satisfies all eligibility criteria and decides to request HIPC assistance, a preliminary HIPC document is first required, followed by a decision point document and a completion point document. - HIPC documents, including HIPC DSAs, are produced jointly with the Bank and are reviewed by both institutions. - Standard procedures apply at the Fund for the review, clearance, and submission to the Board of HIPC documents. - Other country engagement documents (para 46): - Ad hoc Notes, Country Briefs for Management meetings with authorities, and Briefing Books for Management Visits generally do not require interdepartmental review or SPR clearance. - Ad hoc Notes shared with authorities that contain new policy advice require interdepartmental review if such advice deviates from previously agreed policy lines. - Country Briefs for Management meetings and Briefing Books for Management Visits do not require SPR review and clearance, except for policy relevant sections and only where policy lines have changed or are new. - Briefs/books should be sent to SPR and other reviewing departments for information when sending to Management. - Disbursements outside scheduled reviews under SCF arrangements (para 47): - A country may draw previously approved but undrawn amounts under the SCF outside scheduled reviews if: - (i) its representation of a balance of payments need meets the requirements of the PRGT instrument; - (ii) the most recently scheduled review under the arrangement prior to the request has been completed; and - (iii) available information indicates that its continuous PCs are being met. - The Trust Instrument precludes staff from challenging a member’s representation of a balance of payments need prior to providing the requested disbursement. - The Trust Instrument indicates that if subsequently the Board decided that the disbursement took place in the absence of a need, it could seek repayment with interest normally within 30 days of its decision that early repayment is required. - For a country to draw outside of scheduled reviews, it must send a letter to the MD communicating and explaining the decision. - Staff will then circulate a short note for information to the Board, attaching the letter of the authorities. - A press release is issued shortly afterwards. ### Length limits for country documents (paras 48 and Appendix I. Box 1 summary table) - Management-approved length limits (effective for notes/reports sent to management on or after September 1, 2014) and additional limits approved on November 28, 2023 for joint UCT/RSF and PFA documents. - Policy notes — Limits (In words): - Typical surveillance and on-track programs: 2,800 - High vulnerability, G20 country and other global financial center, program request, program cases that are off-track, and combined AIV/UFR-PCI-SMP: 3,600 - Joint RSF request/UCT/A4: 5,100 - Joint RSF request/UCT; Joint RSF review/UCT/A4: 4,600 - Joint RSF review/UCT: 3,600 - Attachments (indicative limit; not for management clearance): 6,000 (or draft staff report, consistent with limits below) - Staff Reports — Limits (excluding annexes): - Stand-Alone AIV: regular: 6,000 - Stand-Alone AIV: G20 and global financial center: 9,500 - Stand-Alone UFR, PCI, SMP: request: 6,000 - Stand-Alone UFR, PCI, SMP: review: 5,000 - Exceptional access UFR: 9,500 - Combined AIV/UFR-PCI-SMP: 9,500 - Joint RSF request/UCT/A4: 10,500 - Joint RSF request/UCT; Joint RSF review/UCT/A4: 10,100 - Joint RSF review/UCT: 9,500 - Post-Financing Arrangements (PFA): 4,500 - Annexes (indicative limit; excluding DSA, informational annex, LOI, MEFP, TMU, and proposed decision): 2,000 - Note on exclusions and cover-page requirements: - The limits would exclude the cover page/memo, (text) tables, (text) figures, the RAM, the ESR country page, and annexes regarding follow up to previous staff AIV advice or FSAP recommendations. - Management requested that all documents subject to word limits indicate both the actual word count and the applicable limit in the cover note, and that staff indicate the reasons for significant deviation in the cover note. *2025 LIC FACILITIES HANDBOOK: APPENDIX IX. DOCUMENTATION AND REVIEW PROCESS — INTERNATIONAL MONETARY FUND* ### References ### References ### IMF Summings, Guidance Notes, and Executive Board Decisions (1987–2007) - International Monetary Fund, 1987, The Chairman’s Summing Up of the Discussion on the Enhancement of the Structural Adjustment Facility—Operational Arrangements (Washington). - ———, 1990, Summing Up by the Chairman—Operational Modalities of the Rights Approach (Washington). - ———, 1997, Acting Chair’s Summing Up - Instrument to Establish a Trust for Special Poverty and Growth Operations for the Heavily Indebted Poor Countries Initiative and Interim ECF Subsidy Operations ( Washington). - ———, 1999a, Summing Up by the Acting Chairman—Fund Policy on Arrears to Private Creditors— Further Considerations (Washington). - ———, 1999b, Poverty Reduction Strategy Papers—Operational Issues (Washington). - ———, 1999c, Summing Up by the Acting Chair - Modifications to the Initiative for Heavily Indebted Poor Countries Executive Board Meeting 99/89 August 1999 ( Washington). - ———, 2001, Guidelines for World Bank and IMF Staffs for Joint Staff Advisory Notes (JSAN) for Poverty Reduction Strategy Papers (Washington). - ———, 2002a, The Acting Chair’s Summing Up on Safeguards Assessments—Review of Experience and Next Steps ( Washington). - ———, 2002b, Review of the Poverty Reduction Strategy Paper Approach—Early Experience with Interim PRSPs and Full PRSPs (Washington). - ———, 2002c, Summing Up by the Acting Chair—Access Policy in Capital Account Crises (Washington). - ———, 2002d, Guidelines on Conditionality (Washington). - ———, 2003, The Acting Chair’s Summing Up - Review of Access Policy Under the Credit Tranches and the Extended Fund Facility, and Access Policy in Capital Account Crises-Modifications to the Supplemental Reserve Facility and Follow-Up Issues Related to Exceptional Access Policy Executive Board Meeting 03/16-February 26, 2003 ( Washington). - ———, 2004a, The Fund’s Support of Low-Income Member Countries—Considerations on Instruments and Financing (Washington). - ———, 2004b, Poverty Reduction Strategy Papers—Progress in Implementation (Washington). - ———, 2004c, Poverty Reduction Strategy Papers—Proposed Amendments to the PRGF Trust and PRGF-HIPC Trust Instruments (Washington). - ———, 2004d, Signaling by the Fund—A Historical Review (Washington). - ———, 2005a, Extension of Post-Program Monitoring to Cover the Use of PRGF Resources (Washington). - ———, 2005b, The Acting Chair’s Summing Up - Review of Access Policy in the Credit Tranches, Under the Extended Fund Facility, and Under the Poverty Reduction and Growth Facility, and Exceptional Access Policy, Executive Board Meeting 05/32 April 1, 2005 (Washington). - ———, 2006a, Revised IMF Staff Statement on Principles Underlying the Guidelines on Conditionality and Operational Guidance to IMF Staff on the 2002 Conditionality Guidelines (Washington). - ———, 2006b, Review of Ex Post Assessments and Issues Relating to the Policy on Longer-Term Program Engagement ( Washington). - ———, 2006c, The Acting Chair's Summing—Up Review of Ex Post Assessments and Issues Related to the Policy on Longer-Term Program Engagement (Washington). - , 2006d, Article VIII Acceptance by IMF Members—Recent Trends and Implications for the Fund (Washington). - ———, 2006e, Making the Misreporting Policies Less Onerous in De Minimis Cases (Washington). - ———, 2007a, Aid Inflows—The Role of the Fund and Operational Issues for Program Design (Washington). - ———, 2007b, IMF Executive Board Discusses Operational Implications of Aid Inflows for IMF Advice and Program Design in Low-Income Countries, PIN No. 07/83 (Washington). - ———, 2007c, Enhancing Collaboration—Joint Management Action Plan (Washington). - ———, 2007d, Proposals to Modify the PRGF-HIPC Trust Instrument—Further Considerations (Washington). ### Facilities, Conditionality, and Low-Income Country Frameworks (2008–2016) - ———, 2008a, Revised Operational Guidance to IMF Staff on the 2002 Conditionality Guidelines (Washington). - ———, 2008b, The Role of the Fund in Low-Income Countries, PIN No. 08/125 (Washington). - ———, 2009a, Joint Staff Advisory Notes (JSANs)—Proposed Amendments to Streamline Modalities (Washington). - ———, 2009b, The Fund’s Facilities and Financing Framework for Low-Income Countries (Washington). - ———, 2009c, GRA Lending Toolkit and Conditionality—Reform Proposals (Washington). - ———, 2009d, Modification of Access Policies for the Poverty Reduction and Growth Facility and the Exogenous Shocks Facility (Washington). - ———, 2009e, A New Architecture of Facilities for Low-Income Countries (Washington). - ———, 2009f, A New Architecture of Facilities for Low-Income Countries and Reform of the Fund’s Concessional Financing Framework—Proposed Decision (Washington). - ———, 2009g, Debt Limits in Fund-Supported Programs—Proposed New Guidelines, and Supplementary Information and Proposed Decision (Washington). - ———, 2009h, Reduction of Blackout Periods in GRA Arrangements (Washington). - ———, 2009i, Creating Policy Space—Responsive Design and Streamlined Conditionality in Recent Low-Income Country Programs (Washington). - ———, 2009j, Bilateral Surveillance Guidance Note (Washington). - ———, 2009k, Eligibility to Use the Fund’s Facilities for Concessional Financing, (Washington). - ———, 2009l, Staff Guidance Note on Debt Limits in Fund-Supported Programs, (Washington). - ———, 2010a, Staff Guidance Note on the Application of the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries ( Washington). - ———, 2010b, Operational Guidance to IMF Staff on the 2002 Conditionality Guidelines, Revised January 25, 2010 (Washington). - ———, 2010c, Ex Post Assessments of Members with a Longer-Term Program Engagement—Revised Guidance Note (Washington). - ———, 2010d, Implementation of the Joint Management Action Plan on Bank-Fund Collaboration (Washington). - ———, 2010e, Guidance Note on the Implementation of Post-Program Monitoring (Washington). - ———, 2010f, Staff Guidance Note on the Use of Fund Resources for Budget Support (Washington). - ———, 2010g, Safeguards Assessments—Review of Experience (Washington). - ———, 2010h, The Acting Chair’s Summing Up Safeguards Assessments—Review of Experience; The Safeguards Policy—Independent Panel’s Advisory Report ( Washington). - ———, 2010i, Review of the Fund’s Strategy on Overdue Financial Obligations (Washington). - ———, 2010j, Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI)—Status of Implementation (Washington). - ———, 2010k, Proposal for a Post-Catastrophe Debt Relief Trust Fund (Washington). - ———, 2010l, Proposal for a Post-Catastrophe Debt Relief Trust Fund (Washington). - ———, 2011a, 2011 Review of Conditionality—Content and Application of Conditionality (Washington). - ———, 2011b, The Fund’s Financing Role—Reform Proposals on Liquidity and Emergency Assistance (Washington). - ———, 2011c, Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI)—Status of Implementation and Proposals for the Future of the HIPC Initiative (Washington). - ———, 2011d, Guidance Note on Letters and Statements Assessing Members’ Economic Conditions and Policies ( Washington). - ———, 2012a, Revisiting the Debt Sustainability Framework for Low-Income Countries (Washington). - ———, 2012b. Eligibility to Use the Fund’s Facilities for Concessional Financing (Washington). - ———, 2012c, Handbook of IMF Facilities for Low-Income Countries (Washington). - ———, 2012d, Review of Facilities for Low-Income Countries (Washington). - ———, 2012e, Review of the Fund’s Strategy on Overdue Financial Obligations (Washington). - ———, 2012f, Proposal to Distribute Remaining Windfall Gold Sales Profits and Strategy to Make the Poverty Reduction and Growth Trust Sustainable (Washington). - ———, 2012g, Staff Guidance Note on the Fund’s Engagement with Countries in Fragile Situations (Washington). - ———, 2013a, Blackout Periods in GRA Arrangements and the Extended Rights to Purchase Policy— A Review (Washington). - ———, 2013b, Review of the Policy on Debt Limits in Fund-Supported Programs (Washington). - ———, 2013c, Eligibility to Use the Fund’s Facilities for Concessional Financing (Washington). - ———, 2013d, Review of Facilities for Low-Income Countries—Proposals for Implementation (Washington). - ———, 2013e, Sovereign Debt Restructuring—Recent Developments and Implications for the Fund’s Legal and Policy Framework ( Washington). - ———, 2013f, Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries (Washington). - ———, 2013g, Staff Guidance Note on the Application of the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries (Washington). - ———, 2013h, Guidance Note on the Fund’s Transparency Policy (Washington). - ———, 2013i, Staff Guidance Note for Public Debt Sustainability Analysis in Market-Access Countries (Washington). - ———, 2014a, Conditionality in Evolving Monetary Policy Regimes (Washington). - ———, 2014b, Revised Operational Guidance to IMF Staff on the 2002 Conditionality Guidelines (Washington). - ———, 2014c, Poverty Reduction and Growth Trust—Review of Interest Rate Structure (Washington). - ———, 2014d, Reform of the Policy on Public Debt Limits in Fund-Supported Programs (Washington). - ———, 2014e, Reform of the Policy on Public Debt Limits in Fund-Supported Programs—Proposed Decision and New Proposed Guidelines (Washington). - ———, 2015a, Proposal to Enhance Fund Support for Low-Income Countries Hit by Public Health Disasters ( Washington). - ———, 2015b, Reform of the Fund’s Policy on Poverty Reduction Strategies in Fund Engagement with Low-Income Countries—Proposals (Washington). - ———, 2015c, Financing for Development—Enhancing the Financial Safety Net for Developing Countries (Washington). - ———, 2015d, Eligibility to Use the Fund’s Facilities for Concessional Financing, 2015 (Washington). - ———, 2015e, Staff Guidance Note on the Implementation of Public Debt Limits in Fund-Supported Programs (Washington). - ———, 2015f, Reforming the Fund’s Policy on Non-Toleration of Arrears to Official Creditors (Washington). - ———, 2015g, Safeguards Assessments—Review of Experience (Washington). - ———, 2015h, Safeguards Assessments Policy—External Expert Panel’s Advisory Report (Washington). - ———, 2015i, The Acting Chair’s Summing Up Safeguards Assessments—Review of Experience, Executive Board meeting 15/96, October 23, 2015 (Washington). - ———, 2015j, Guidance Note for Surveillance Under Article IV Consultation (Washington). - ———, 2015k, The Chairman’s Summing Up – Reforming the Fund’s Policy on Non-Toleration of Arrears to Official Creditors (Washington). - ———, 2015l, Selected Streamlining Proposals Under the FY16–FY18 Medium-Term Budget— Implementation Issues in FY2016–FY2018 Medium-Term Budget; Selected Streamlining Proposals Under the FY16–FY18 Medium-Term Budget—Implementation Issues ( Washington). - ———, 2015m, The Acting Chair’s Summing Up - Reform of the Fund’s Policy on Poverty Reduction Strategies in Fund Engagement with Low-Income Countries—Proposals Executive Board Meeting 15/62 June 22, 2015 (Washington). - ———, 2016a, Staff Guidance Note for the Conduct of Ex Post Peer Reviewed Assessments of Members with Longer-Term Program Engagement (Washington). - ———, 2016b, Poverty Reduction and Growth Trust—Review of Interest Rate Structure (Washington). - ________, 2016c, Financing for Development: Enhancing the Financial Safety Net for Developing Countries—Further Considerations (Washington). - ________, 2016d, 2016 Handbook of IMF Facilities for Low-Income Countries (Washington). - ________, 2016e, Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI)—Statistical Update ( Washington). ### Recent Reviews, Emergency Financing, Debt Policy, and Facility Reforms (2017–2025) - ———, 2017a, Eligibility to Use the Fund’s Facilities for Concessional Financing, 2017 (Washington). - ———, 2017b, Large Natural Disasters—Enhancing the Financial Safety Net for Developing Countries (Washington). - ———, 2017c, Adequacy of the Global Financial Safety Net—Proposal for a New Policy Coordination Instrument (Washington). - ———, 2017d, Guidance Note on Post Program Monitoring (Washington). - ________, 2017e, 2017 Handbook of IMF Facilities for Low-Income Countries (Washington). - ———, 2018a, IEO Report on The IMF and Fragile States (Washington). - ———, 2018b, Guidance Note on the Bank-Fund Debt Sustainability Framework for Low Income Countries ( Washington). - ———, 2019a, 2018-19 Review of Facilities for Low-Income Countries---Reform Proposals (Washington). - ———, 2019b, 2018-19 Review Of The Financing Of The Fund’s Concessional Assistance And Debt Relief To Low-Income Member Countries ( Washington). - ———, 2019c, Building Resilience in Developing Countries Vulnerable to Large Natural Disasters (Washington). - ———, 2019d, 2019 Review of the PRGT Interest Rate Structure (Washington). - ———, 2019e, 2018 Review of Program Design and Conditionality (Washington). - ———, 2019f, The Acting Chair’s Summing Up -2018-19 Review of Facilities for Low-Income Countries—Reform Proposals; Review of the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Countries Executive Board Meeting 19/42 May 24, 2019 ( Washington). - ———, 2020a, Eligibility to Use the Fund’s Facilities for Concessional Financing (Washington). - ———, 2020b, Enhancing the Emergency Financing Toolkit—Responding to the Covid-19 Pandemic— Supplementary Proposal on Handling PRGT High-Access Procedures Under Emergency Financing Requests ( Washington). - ———, 2020c, Temporary Modification to the Fund’s Annual Access Limits (Washington). - ———, 2020d, Policy Safeguards for Countries Seeking Access to Fund Financial Support that Would Lead to High Levels of Combined GRA-PRGT Exposure (Washington). - ———, 2020e, Reform of the Policy on Public Debt Limits in IMF-Supported Programs (Washington). - ———, 2020f, Catastrophe Containment and Relief Trust: Policy Proposals and Funding Strategy (Washington). - ———, 2021a, Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic ( Washington). - ———, 2021b, Review of the Temporary Modifications to the Fund’s Access Limits in Response to COVID-19 Pandemic ( Washington). - ———, 2021c, Temporary Extensions and Modifications of Access Limits in the Fund’s Lending Facilities ( Washington). - ———, 2021d, Short Extension of the Temporary Increases in PRGT Access Limits and the Review of the Interest Rate Structure Under the PRGT ( Washington). - ———, 2021e, Macroeconomic Developments and Prospects in Low-Income Countries—2021 (Washington). - ———, 2021f, Post Program Monitoring During the Pandemic: Proposal for Temporary Streamlining of Procedures and Renaming of Policy ( Washington). - ———, 2021g, Guidance Note On Implementing The Debt Limits Policy In Fund Supported Programs (Washington). - ———, 2021h, Review of the Debt Sustainability Framework for Market Access Countries (Washington). - ———, 2022a, Poverty Reduction and Growth Trust – Guidance Note on New Enhanced Safeguards for Debt Sustainability and Capacity to Repay ( Washington). - ———, 2022b, Reviews of the Fund’s Sovereign Arrears Policies and Perimeter (Washington). - ———, 2022c, IMF Strategy for Fragile and Conflict-Affected States (FCS) (Washington). - ———, 2022d, Staff Guidance Note on the Sovereign Risk and Debt Sustainability Framework for Market Access Countries ( Washington). - ———, 2022e, Proposal for a Food Shock Window under the Rapid Financing Instrument and Rapid Credit Facility ( Washington). - ———, 2022f, Proposal for a Staff-Monitored Program with Executive Board Involvement (Washington). - ———, 2022g, Proposal to Establish a Resilience and Sustainability Trust (Washington). - ———, 2022h, Guidance Note for Surveillance Under Article IV Consultations (Washington). - ———, 2022i, Safeguards Assessments - 2022 Review of Experience (Washington). - _______, 2022j, Staff-Monitored Programs—Updated Operational Guidance Note (Washington). - ———, 2023a, Staff Guidance Note on the Implementation of the IMF Strategy for Fragile and Conflict Affected States ( Washington). - ———, 2023b, Changes to the Fund’s Financing Assurances Policy in the Context Of Fund Upper Credit Tranche (UCT) Financing Under Exceptionally High Uncertainty ( Washington). - ———, 2023c, Review of The Cumulative Access Limits Under The Rapid Financing Instrument and The Rapid Credit Facility ( Washington). - ———, 2023d, Review of Experience with The Food Shock Window Under The Rapid Financing Instrument and The Rapid Credit Facility ( Washington). - ———, 2023e, Interim Review of Access Limits Under the Poverty Reduction and Growth Trust and Initial Considerations for Access Limits under the General Resource Account (Washington). - ———, 2023f, Resilience and Sustainability Facility – Operational Guidance Note (Washington). - ———, 2023g, Poverty Reduction and Growth Trust—Review of Interest Rate Structure— Postponement ( Washington). - ———, 2023h, Review of the Policy Coordination Instrument and Proposal to Eliminate the Policy Support Instrument ( Washington). - ———, 2023i, 2023 Handbook of IMF Facilities for Low-Income Countries ( Washington) - ———, 2023j, Guidance Note for the Fund's Policy on Multiple Currency Practices (Washington) - ———, 2024a, Review of the Policy on Staff-Monitored Program With Executive Board Involvement (Washington). - ———, 2024b, Review of the Framework for Data Adequacy Assessment for Surveillance (Washington). - ———, 2024c, Operational Guidance Note On Program Design and Conditionality (Washington). - ———, 2024d, Policy Coordination Instrument – Updated Operational Guidance Note (Washington). - ———, 2024e, 2024 Review of The Poverty Reduction And Growth Trust Facilities And Financing — Reform Proposals ( Washington). - ________, 2024f, Operational Guidance Note for IMF Engagement on Social Spending Issues (Washington). - ———, 2024g, Supplement to the 2018 Guidance Note on the Bank-Fund Sustainability Framework for Low Income Countries ( Washington) - ———, 2024h, the 2024 Comprehensive Review of GRA Access Limits (Washington) - ———, 2024i, Guidance Note On The Financing Assurances And Sovereign Arrears Policies And The Fund's Role In Debt Restructurings ( Washington) - ———, 2024j, Review Of The Fund’s Transparency Policy And Open Archives Policy (Washington). - ———, 2025, Poverty Reduction and Growth Trust – Guidance Note on the Strengthened Policy Safeguards ( Washington) *Source: ppea2025010 - References* --- _Source: https://www.imf.org/-/media/files/publications/pp/2025/english/ppea2025010.pdf_