IMF Executive Board Makes Temporary Modifications to the Annual and Cumulative Access Limits for Fund Lending
IMF News, March 7, 2023
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- Published: March 7, 2023
Decision summary
- The Executive Board agreed to temporarily increase the limits on members’ annual and cumulative access to Fund resources in the General Resources Account (GRA).
- The annual limit in the GRA is raised to 200 percent of quota for a period of 12 months.
- The cumulative limit in the GRA is raised to 600 percent of quota for a period of 12 months.
- The changes are intended to better support members—particularly emerging markets and developing economies—facing increased financing pressures and vulnerabilities.
- If circumstances warrant, staff would re-engage the Executive Board before the end of the 12-month period on a proposal to maintain for longer the higher GRA access limits.
- Access to resources beyond these limits remains subject to the requirements of the Fund’s exceptional access framework.
Executive Board assessment and rationale
- Directors welcomed the temporary 12-month increase, noting the challenging economic environment and uncertain prospects faced by emerging markets and developing economies.
- Directors supported increasing the annual limit from 145 percent of quota to 200 percent of quota and the cumulative limit from 435 percent of quota to 600 percent of quota for the next 12 months.
- Many Directors called for staff to engage early with the Executive Board if an extension is under consideration and agreed that an extension could be appropriate if circumstances warrant.
- Directors noted that the impact of the proposed increases on the Fund’s liquidity and on the demand for Fund resources even under extreme scenarios is expected to be limited, though subject to uncertainty.
- Directors agreed with the proposed limited grandfathering following the expiration of the period of temporarily higher access limits.
- Directors emphasized diligent application of standard (non-exceptional access) policy criteria on a case-by-case basis and stressed enhanced scrutiny and additional safeguards for exceptional access cases.
- Directors considered that although the increased access limits heighten risks to the Fund, these risks are expected to be manageable.
- Directors agreed that an interim review of the adequacy of the precautionary balances could also serve as risk mitigation.
- A comprehensive review of access limits, tentatively planned for 2024, will assess the GRA access limits in the context of the outcome of the 16th General Review of Quotas.
PRGT (Poverty Reduction and Growth Trust) considerations
- PRGT access limits were last raised by 45 percent in 2021, bringing them into alignment with GRA access limits for the first time.
- Demand for PRGT resources has increased sharply and is expected to grow further given successive shocks.
- The Fund will undertake a review of PRGT access limits once sufficient additional resources have been pledged to the PRGT, which currently faces a sizable subsidy resource gap.
- The IMF is working closely with members to fill the PRGT subsidy resource gap.
- Directors agreed that, once substantial progress with PRGT fundraising toward the SDR 2.3 billion first stage target for subsidy resources agreed in 2021 has been made—with total pledges of SDR 2 billion or more—access limits under the PRGT would be reviewed at an ad hoc interim review.
- Most Directors called on members in a strong economic position to accelerate their support for PRGT fundraising efforts.
- Many Directors also called for an early examination of the possible use of the Fund’s internal resources.
Context and precedent
- The access limits for the GRA were last set in 2016, with an annual limit of 145 percent of quota and a cumulative limit of 435 percent of quota.
- The annual limit was also temporarily increased during mid-2020 until end 2021 to 245 percent of quota, to help Fund members contain the impact of the COVID-19 pandemic.
- The Executive Board noted the automatic adjustment of thresholds for the combined access to GRA and PRGT resources under the policy on safeguards for high combined GRA and PRGT exposure with any changes to the overall GRA access limits, and supported limited grandfathering in the application of this policy.
IMF Executive Board press release, March 6, 2023.