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IMF Executive Board Approves Proposals to Enhance the Fund’s Emergency Financing Toolkit to US$100 Billion

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Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves Proposals to Enhance the Fund’s Emergency Financing Toolkit to US$100 Billion







April 9, 2020















Washington, DC –
The Covid-19 pandemic is taking a human toll and has unleashed a series of
shocks on the Fund’s entire membership, creating severe disruption in the
global economic and financial system. As a result, many emerging market and
developing country (EMDC) members face urgent and unprecedented financing
needs, creating significant immediate demand for Fund resources. In this
context, the IMF Executive Board approved proposals to enhance the Fund’s
emergency financing toolkit, specifically the Rapid Financing Instrument
(RFI), available to all members, and the Rapid Credit Facility (RCF),
available only to low-income countries eligible for concessional financing.

“As we are responding to this unprecedented number of calls for emergency
financing—from over 90 countries so far—doubling access to our emergency
facilities will help us to meet the expected demand of about US$100 billion
in financing and provide stronger support to our member countries in
addressing the COVID-19 crisis”, IMF Managing Director Kristalina Georgieva
said.

These proposals are part of a broader package to ensure a rapid and
decisive Fund response to the urgent financing needs of the membership. The
Executive Board also adopted complementary proposals to accelerate Board
consideration of member financing requests under the RCF and RFI, and
assistance under the Catastrophe Containment and Relief Trust (see

Streamlining Procedures for Board Consideration of the Fund’s Emergency
Financing During Exceptional Circumstances Involving a Pandemic).


Executive Board Assessment

[1]

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Executive Directors welcomed the timely discussion on enhancing the Fund’s
emergency financing toolkit, emphasizing the importance of a rapid and
decisive Fund response to COVID‑19 to help members meet their urgent
financing needs. To that end, Directors agreed on a temporary increase in
access limits under the regular window of the RFI and the exogenous shocks
window of the RCF, with annual access limits rising from 50 to 100 percent
of quota and cumulative limits rising from 100 to 150 percent of quota, net
of scheduled repayments or repurchases, respectively.

Directors agreed that the new access limits would apply for a temporary
six‑month period, with a review of the limits as proposed. To facilitate
urgent financing requests, most Directors supported the proposal to
temporarily suspend the procedures for high access RCF requests under the
PRGT. Directors emphasized that this emergency financing provided by the
Fund should be truly additional, both for access to the PRGT and GRA. In
this regard, many Directors looked forward to exploring ways in which a
temporary relaxation in normal access limits could accommodate the surge in
emergency lending. Directors also highlighted the important catalytic role
of Fund emergency financing in spurring additional resources from other
partners.

Directors stressed the importance of carefully monitoring implementation,
including by putting in place appropriate safeguards of accountability,
transparency, and control to ensure the appropriate use of emergency
financing, where governance and corruption vulnerabilities are
macro‑critical. Careful consideration will also need to be given to debt
sustainability issues.

Directors concurred that the impact of higher RFI access limits on the
General Resources Account would be manageable, subject to heightened
Covid‑19 uncertainties. However, they recognized that the higher access
limits under the RCF would exacerbate growing pressures on PRGT loan
resources, and stressed the need for expedited and ambitious fundraising
efforts.

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Provided that sufficient resources were raised quickly, Directors looked
forward to considering an increase in the overall PRGT annual normal access
limit. This would provide additional space for PRGT financing later in the
year, including blended with potential arrangements in the GRA. In this
regard, Directors asked for close assessments of the self‑sustainability of
the PRGT. They looked forward to considering additional suggestions to
strengthen the Fund’s efforts in the upcoming review of the Fund’s
concessional financing.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Olga Stankova

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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