Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries
Policy Papers, October 4, 2013
Source details
- Canonical URL
- Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries
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Bibliographic details
- Published: October 4, 2013
- Series: Policy Papers
Summary
- Purpose: Proposes reforms to the discount rates used by the Bank and the Fund to (a) calculate the present value (PV) of the external debt of low-income countries (LICs) in debt sustainability analyses (DSAs) and (b) to calculate the grant element of individual loans.
- Core proposal: A single uniform discount rate to be used for these related operational purposes.
- Preparation: Prepared as a joint product of Bank and Fund staff, with the exception of the decision, which is Fund-specific.
- Context reference: Consistent with the conclusions of the March 2013 review of the Fund’s debt limits policy.
Key findings and propositions
- Single uniform discount rate:
- Recommends replacing multiple discount rates with one uniform discount rate for external debt PV calculations in LIC DSAs and for calculating the grant element of individual loans.
- Alignment with prior review:
- The proposal aligns with conclusions from the March 2013 review of the Fund’s debt limits policy.
- Operational distinction:
- While jointly prepared by Bank and Fund staff, the ultimate decision on adoption is Fund-specific.
Scope and operational use
- Uses proposed:
- Calculation of the present value (PV) of external debt of low-income countries (LICs) in debt sustainability analyses (DSAs).
- Calculation of the grant element of individual loans.
- Intended institutions:
- The Bank and the Fund for the two related operational purposes described above.
Publication and metadata
- Title: Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries
- Publication date on page: October 4, 2013
- Document type: Policy Papers (web landing page)
- Subjects listed: Debt sustainability analysis, Discount rates, Executive Board decisions, External debt, Lapse of time approval, Low-income developing countries
- Citation preview as shown on page: Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries, (USA: International Monetary Fund, 0) accessed 9/11/2026
Source: Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries (web landing page).
Content in this bundle
- Executive Summary