Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic
Policy Papers, July 22, 2021
Source details
- Canonical URL
- Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic
Other formats
Bibliographic details
- Published: July 22, 2021
- Series: Policy Papers
- DOI: https://doi.org/10.5089/9781513589633.007
Summary
- Proposes a package of policy reforms and a funding strategy to ensure the Fund has the capacity to respond flexibly to low-income countries’ (LICs) needs during the pandemic and recovery.
- Emphasizes maintaining concessional financing terms and strengthening frameworks to manage debt sustainability and repayment capacity.
- Recommends retaining zero interest rates on PRGT loans, consistent with the established rules for setting these interest rates.
Key policy reforms proposed
- Raise the normal annual/cumulative limits on access to PRGT resources to 145/435 percent of quota, the same thresholds for normal access in the GRA.
- Eliminate the hard limits on exceptional access (EA) to PRGT resources for the poorest LICs, enabling them to obtain all financing on concessional terms if the EA criteria are met.
- Change the framework for blending concessional and non-concessional resources to make it more robust and less complex.
- Strengthen safeguards to address concerns regarding debt sustainability and capacity to repay the Fund.
- Retain zero interest rates on PRGT loans, consistent with the established rules for setting these interest rates.
Funding strategy and operational considerations
- Ensure the Fund has capacity to respond flexibly during the pandemic and recovery through the proposed package of reforms and funding strategy.
- Adjust access limits and exceptional access rules to align PRGT concessional support with LICs’ financing needs while addressing debt sustainability risks.
- Simplify and fortify blending arrangements between concessional and non-concessional resources to improve clarity and effectiveness.
Subject areas and keywords highlighted
- Subject: Concessional external borrowing, COVID-19, Credit, External debt, Financial institutions, Health, Income, Loans, Monetary policy, Money, National accounts, Political economy
- Keywords: Concessional external borrowing, COVID-19, Credit, fund financing commitment, Global, Income, Loans, PRGT account, PRGT lending, PRGT resource, PRGT subsidization, WB financing
Publication particulars (from the content)
- Pages: 155
- Volume: 2021
- Issue: 053
- Series: Policy Paper No. 2021/053
- DOI: https://doi.org/10.5089/9781513589633.007
- Stock No: PPEA2021053
- ISBN: 9781513589633
- ISSN: 2663-3493
- Publication date: July 22, 2021
International Monetary Fund. Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic (Policy Paper No. 2021/053, July 22, 2021).
Content in this bundle
- Policy Paper