Policy Safeguards For Countries Seeking Access To Fund Financial Support That Would Lead To High Levels Of Combined GRA-PRGT Exposure

Policy Papers, September 18, 2020

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Policy Safeguards For Countries Seeking Access To Fund Financial Support That Would Lead To High Levels Of Combined GRA-PRGT Exposure

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Bibliographic details

• Published: September 18, 2020
• Series: Policy Papers

Overview

• Publication date: September 18, 2020
• Summary (as provided):
  • "This paper proposes safeguards broadly aligned with the GRA exceptional access policy that will apply in cases where combined GRA and PRGT credit exposure exceeds the GRA thresholds. The new safeguards would help to mitigate financial risks to the PRGT and the GRA, respectively, that arise from a member having high levels of combined credit from these two sources of funding. The proposed policy builds on the current policies on safeguards to Fund resources (both the Fund’s resources in the GRA and under the PRGT as Trustee, respectively)."

Proposed safeguards and scope

• Objective:
  • Apply safeguards broadly aligned with the GRA exceptional access policy when combined GRA and PRGT credit exposure exceeds the GRA thresholds.
• Intended effect:
  • Mitigate financial risks to the PRGT and the GRA that arise from a member having high levels of combined credit from these two sources of funding.
• Policy design principle:
  • Build on the current policies on safeguards to Fund resources (both the Fund’s resources in the GRA and under the PRGT as Trustee, respectively).

Key findings and emphases

• The paper focuses on situations where combined GRA and PRGT credit exposure exceeds the GRA thresholds.
• Emphasis on alignment with existing GRA exceptional access policy and existing safeguards frameworks for GRA and PRGT resources.

Policy implications and recommendations (as framed in the source)

• Propose safeguards that:
  • Are broadly aligned with the GRA exceptional access policy.
  • Apply specifically in cases of high combined GRA-PRGT exposure relative to GRA thresholds.
  • Mitigate financial risks to both the PRGT and the GRA.
  • Build on current safeguards policies for Fund resources (GRA and PRGT as Trustee).

Subjects and keywords

• Subject: Credit, Debt sustainability, Debt sustainability analysis, External debt, Money, Poverty, Poverty reduction and development, Poverty reduction strategy, Public debt
• Keywords: Combined GRA-PRGT Exposure, Credit, Debt sustainability, Debt sustainability analysis, financing, financing request, HCC threshold, HCC Thresholds, policy safeguard, Poverty reduction strategy, PP, PRGT resource, PRGT-eligible country

Content in this bundle

• Policy Paper
  • Policy Paper (Markdown version)
  • Policy Paper (PDF)