The IMF’s mandate is to promote members’ balance of payments stability, as well as foster global financial stability and economic growth. Today, low- and vulnerable middle-income countries confront the challenges of inflation, rising debt levels, and geopolitical uncertainty, as they also face longer-term, structural risks to macroeconomic and balance of payments stability, such as climate change and pandemic preparedness.
The IMF’s Resilience and Sustainability Trust (RST) helps low-income and vulnerable middle-income countries build resilience to external shocks and ensure sustainable growth, contributing to their longer-term balance of payments stability. It complements the IMF’s existing lending toolkit by providing longer-term affordable financing to address longer-term structural challenges, including climate change and pandemic preparedness.
Prior to the approval of the RST, the IMF’s lending instruments supported members facing short- and medium-term challenges through two key financing sources: the General Resources Account (GRA) which is accessible to all countries; and the Poverty Reduction and Growth Trust (PRGT) available to low-income countries on concessional terms (currently zero interest rates). The RST complements other lending instruments by providing affordable, longer-term financing to contribute to prospective balance of payments stability to enhance economic resilience and sustainability.
The RST is amplifying the effect of the US$650 billion general SDR allocation implemented in 2021 by channeling resources from economically stronger members to countries where needs are greatest.
This Trust is allowing the Fund to broaden its lending support within its mandate, while at the same time limiting risks to members’ financial positions at the Fund by permitting a subset of the membership—those with strong external positions—to pool financial resources that are separate from the Fund’s general resources for the benefit of another subset of the membership—low-income countries and vulnerable middle-income countries.
The RST provides policy support and affordable longer maturity financing – with a 20-year maturity and a 10½ -year grace period – to help build resilience against long-term risks to balance of payments stability. About three-quarters of the IMF’s country membership is eligible for RST financing, including low-income members as well as most middle-income countries and all small developing states.
RST resources finance IMF-supported programs under the Resilience and Sustainability Facility (RSF); this Factsheet outlines the key features of this facility.
The focus of the RST on prospective balance of payments stability is well aligned with the Fund’s mandate and existing guidelines on the remit of Fund engagement with the membership (outlined in the 2012 Integrated Surveillance Decision). The RST aims to help low-income and vulnerable middle-income countries address longer-term structural challenges that pose macroeconomic risks, including climate change and pandemic preparedness.
An important role of the Fund is to help members address balance of payments issues through the provision of financial resources.Shoring up prospective balance of payments stability has become even more important as countries navigate multiple, persistent shocks that demand greater resilience and sustainability.
The RST is a loan-based trust administered by the IMF, with a governance and financial structure broadly similar to that of the long-standing Poverty Reduction and Growth Trust (PRGT). RST resources are be mobilized based on voluntary contributions from IMF members with strong external positions, including those wishing to channel SDRs for the benefit of low-income and more vulnerable middle-income members.
The financial architecture is designed to ensure the safety and liquidity of contributors’ loan and deposit claims on the RST, which will retain their reserve asset character, while minimizing the need for budgetary contributions.
Information on the latest RST funding status can be found here.
Yes, the RST is open for business since October 2022.
Our initial country cases focused on climate change and rely on broad principles for collaboration developed with the World Bank for climate change focused RSF arrangements. Similar principles for collaboration are under development for RSF arrangements focused on pandemic preparedness, with the World Bank and World Health Organization.
