The International Monetary Fund (IMF) has increased normal limits on access to concessional financing by 45 per cent to better support low-income countries (LICs) during the COVID-19 pandemic and the recovery.
IMF's Executive Board approved the decision during a recent meeting, according to a press statement.
The board approved a set of reforms to the fund’s concessional lending facilities to better support the poor countries during the pandemic and the recovery while continuing to provide concessional loans at zero interest rates.
“The centrepiece of the approved policy reforms is a 45 per cent increase in the normal limits on access to concessional financing, coupled with the elimination of hard limits on access for the poorest countries,” the IMF said in the statement issued on Thursday.
“These higher access limits will facilitate the provision of more concessional support to LICs with strong policies and large balance of payments needs,” it said.
The Executive Board also approved a two-stage funding strategy to cover the cost of pandemic-related concessional lending and support the Poverty Reduction and Growth Trust (PRGT).
“The first stage of the strategy aims to secure SDR 2.8 billion in subsidy resources (to support zero interest rates), and an additional SDR 12.6 billion in loan resources which could be facilitated by the “channelling” of SDRs,” it added.