Proposed Decisions to Modify the New Arrangements to Borrow and to Extend the Deadline for a Review of the Borrowing Guidelines

Policy Papers, February 13, 2020

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Canonical URL: Proposed Decisions to Modify the New Arrangements to Borrow and to Extend the Deadline for a Review of the Borrowing Guidelines

The paper presents a proposal for reforming the New Arrangements to Borrow (NAB) with a doubling of the aggregate size of the NAB and amendments to the NAB Decision.
The paper also proposes a 6-month extension of the deadline for the review of the Guidelines for Borrowing by the Fund to end-June 2020.

Doubling the aggregate size of NAB credit arrangements through a doubling of all current NAB credit arrangements.
Establishing a new NAB period, extending from January 1, 2021 through end-2025.
Updating the NAB Decision to reflect that some provisions have become obsolete or outdated.
Including a new provision in the NAB Decision limiting the activation of bilateral borrowing during the new NAB period.
NAB-related terminology preserved as used: Credit, credit arrangement, Global, NAB activation condition, NAB increase, NAB obligation, NAB participant, NAB reform, NAB renewal decision.

The proposal centers on scaling up NAB capacity by a factor of two (doubling all current NAB credit arrangements).
The proposal pairs the size increase with governance updates to the NAB Decision and an explicit constraint on bilateral borrowing activation during the new NAB period.
Timing of the proposed NAB period: January 1, 2021 through end-2025.