IMF Rapid Credit Facility (RCF)

April 9, 2020

The Rapid Credit Facility (RCF) provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need. The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, including in times of crisis. The RCF places emphasis on the country’s poverty reduction and growth objectives.

Financial assistance tailored to country needs

Purpose. The RCF provides low-access, rapid, and concessional financial assistance to LICs facing an urgent balance of payments need, without ex post conditionality. It can provide support in a wide variety of circumstances, including shocks, natural disasters, and emergencies resulting from fragility. The RCF also provides policy support and may help catalyze foreign aid.

Eligibility. The RCF is available to PRGT-eligible members that face an urgent balance of payments need, where a full-fledged economic program is either not necessary (for instance because of the transitory and limited nature of the shock) or not feasible (for instance because of capacity constraints or domestic fragilities).

Duration and repeated use. Financial assistance under the RCF is provided as an outright loan disbursement. While RCF financing takes the form of a one-off disbursement., there is scope for repeat use. A repeat use of the RCF is possible within any three-year period if the balance of payments need is caused primarily by a sudden and exogenous shock or the country has established a track record of adequate macroeconomic policies. However, no more than two disbursements may be made in any twelve-month period. Repeat use of the RCF may facilitate eventual transition to an ECF arrangement.

Access. Access to RCF financing is determined on a case-by-case basis, taking into account 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. In addition, it also takes into account the size and likely persistence of the shock. In response to members’ large and urgent Covid-19-related financing needs, access limits under the exogenous shock window of the RCF have been temporarily increased from 50 to 100 percent of quota per year, and from 100 to 150 percent of quota on a cumulative basis, net of scheduled repurchases. The higher access limits will apply for an initial six-month period, from April 6, 2020 to October 5, 2020, and may be extended by the Board. Access under the regular window of the RCF is still limited to 50 percent of quota per year and 100 percent of quota on a cumulative basis, with an annual access norm and a per disbursement limit of 25 percent of quota, and the possibility of up to two disbursements during a twelve-month period. Under the large natural disaster window of the RCF, access remains limited to 80 percent of quota annually and 133.33 percent of quota cumulatively, subject to an assessment that the disaster has caused damage of at least 20 percent of the member’s GDP. 

Limited conditionality

Fund support under the RCF is provided without ex post program-based conditionality or reviews. Economic policies supported under the RCF should aim at addressing the underlying balance of payments difficulties and support the country's poverty reduction and growth objectives.

Concessional lending terms

Financing under the RCF carries a zero interest rate, has a grace period of 5½ years, and a final maturity of 10 years.