IMF Executive Board reviews the Staff-Monitored Program with Board Involvement
IMF News, February 20, 2024
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Bibliographic details
- Published: February 20, 2024
Overview
- Press Release No. 24/52
- Date on page: February 20, 2024
- The Executive Board completed the review of the policy on Staff-Monitored Programs with Board Involvement (PMB).
- The PMB is an instrument to help member countries establish a track record to access an IMF-supported program.
Executive Board decision
- The Executive Board endorsed the proposal to keep the PMB in the Fund’s toolkit.
- A subsequent review of the instrument is expected in three years.
- The Board completed the review on February 7 (date of completion noted in the text).
Purpose and use criteria of the PMB
- Objective: To build or rebuild a track record of policy implementation towards an Upper Credit Tranche (UCT)-quality Fund-supported program.
- PMB is carefully circumscribed for member countries under either:
- (i) an ongoing concerted international effort by creditors or donors to provide substantial new financing or debt relief in support of the member’s policy program; or
- (ii) significant outstanding credit under emergency financing (EF) instruments at the time of a new EF request.
- The PMB allows the Executive Board to:
- Opine, at the time of PMB approval, on the robustness of the member’s policies to meet the program’s objectives.
- In the context of reviews, opine on whether it agrees with staff that the member is on track to meet those objectives.
Experience and cases to date
- Since inception, three members have implemented PMBs:
- Malawi
- Ukraine
- South Sudan
- Given the limited number of cases, further experience is needed to draw more definitive conclusions on the PMB’s usefulness relative to alternative instruments.
Executive Board Assessment (summary of Directors’ views)
- Broad support to maintain the PMB in the Fund’s toolkit, while noting limited case experience.
- Agreement that the Staff-Monitored Program (SMP) should remain the Fund’s primary instrument to build or rebuild a track record of policy implementation toward a UCT-quality program.
- Noted potential benefits of limited Executive Board involvement through the PMB:
- Enhancing donor coordination.
- Catalyzing additional financial support including in low-income, fragile, and conflict-affected countries.
- Creating an additional safeguard in cases of elevated emergency financing exposure.
- Reflecting the Board’s views on policies at an earlier stage, thereby facilitating the transition to UCT-quality programs.
- Positive experiences cited for Ukraine and Malawi.
- Concerns and caveats raised by Directors:
- Limited number of PMB cases prevents firm conclusions on pros and cons.
- A few Directors were skeptical about PMB merits relative to the regular SMP.
- Access to the PMB should remain limited to the two specified use criteria to prevent encroachment on SMP use.
- The choice between a PMB or a regular SMP should remain voluntary and rest with the requesting member.
- Importance of mitigating risks that could blur the lines between Board-endorsed programs and SMPs:
- Maintain effective communication on the nature and purpose of the PMB.
- Communicate clearly that responsibility for PMBs rests with staff and management, and the Board has limited involvement and does not endorse a PMB.
- Directors encouraged the next review to include an assessment of risks and challenges that may emerge with more PMB experience.
- Timing of next review:
- Directors agreed to have the review in three years once more experience is gained.
- A number of Directors were open to an earlier review if warranted.
Contact information
- IMF Communications Department, MEDIA RELATIONS
- PRESS OFFICER: Randa Elnagar
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- Twitter: @IMFSpokesperson
International Monetary Fund