Rapid Financing Instrument (RFI)

October 4, 2022

The Rapid Financing Instrument (RFI) provides rapid financial assistance, which is available to any IMF member countries facing an urgent balance of payments need. The RFI was created as part of a broader reform to make the IMF’s financial support more flexible to address the diverse needs of member countries and can be used in a wide range of circumstances.

Emergency financing to meet urgent needs

Purpose. The RFI provides rapid and low-access financial assistance to any qualifying member country facing urgent balance of payments needs that, if not addressed, would result in an immediate and severe economic disruption. It can provide support to meet a broad range of needs, including those arising from commodity price shocks, natural disasters, conflict and post-conflict situations, emergencies resulting from fragility, and food shocks.

Qualification. The RFI is available to all member countries, although member countries eligible for the Poverty Reduction and Growth Trust are more likely to use the similar, concessional Rapid Credit Facility (RCF). Like the RCF, the RFI is designed for situations where a full-fledged economic program is not necessary because the need is transitory and limited in nature, or not feasible because a country’s policy design or implementation capacity is limited.

Windows. There are three windows under the RFI:

  • Regular window: for urgent BoP needs caused by wide range of sources including domestic instability, exogenous shocks and fragility. Access is up to 50 percent of quota per year and 150 percent of quota on a cumulative basis. A higher cumulative access limit (175 percent of quota) would be applied if the time-bound food shock window is used (see below).
  • Large Natural Disaster window: for urgent BoP needs arising from natural disasters where damage is assessed to be equivalent to or exceed 20 percent of the member’s GDP. Access of up to 80 percent of quota per year and 183.33 percent of quota on a cumulative basis.
  • Food Shock Window: for urgent BoP needs due to acute food insecurity, a sharp increase in the food or fertilizer import bill, or a shock to cereal exports. Access of up to 50 percent of quota during the 12-month period from September 30, 2022 to September 29, 2023. Access under the food shock window will be additional to the annual access limits of other windows.

Access to RFI financing is determined on a case-by-case basis, considering the country’s balance of payments need, the strength of its macroeconomic policies, capacity to repay the Fund, the amount of outstanding Fund credit, and the member’s record of past use of Fund credit.

The current cumulative access limits of the regular shock window and large natural disaster window, which remain at the level temporarily raised in response to members’ large and urgent COVID-19-related financing needs, will be reviewed by end-June 2023. A review of the food shock window is also expected to be conducted by end-June 2023.

While financing under the RFI is often a one-off purchase in the case of an urgent balance of payments need of limited duration, there is scope for repeated use. A repeated use of the RFI within any three-year period is possible if the BoP need is caused primarily by an exogenous shock, or the country has established a track record of adequate macroeconomic policies, including through an SMP (or PMB, where applicable), prior to the request.

Limited conditionality

Fund support under the RFI is provided without ex-post program-based conditionality or reviews, although prior actions sometimes apply. Economic policies supported under the RFI should aim at addressing the underlying balance of payments difficulties and support the country's economic objectives.

Affordable lending terms

Financial assistance provided under the RFI is subject to the same financing terms as the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL) and Stand-By Arrangements (SBA), and should be repaid within 3¼ to 5 years.