Fund Concessional Financial Support For Low-Income Countries

Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic

July 22, 2021

Preview Citation

Format: Chicago

Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic, (USA: International Monetary Fund, 2021) accessed October 6, 2024

Summary

This paper proposes a package of policy reforms and a funding strategy to ensure that the Fund has the capacity to respond flexibly to LICs’ needs during the pandemic and recovery. The key policy reforms proposed include: • raising 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; • eliminating 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; • changes to the framework for blending concessional and non-concessional resources to make it more robust and less complex; • stronger safeguards to address concerns regarding debt sustainability and capacity to repay the Fund; and • retaining zero interest rates on PRGT loans, consistent with the established rules for setting these interest rates.

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 Details

Pages:

155
Volume:

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DOI:

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Issue:

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Series:

Policy Paper No. 2021/053
Stock No:

PPEA2021053
ISBN:

9781513589633
ISSN:

2663-3493

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