COVID-19: IMF approves funding reforms for low-income countries
The Executive Board of the International Monetary Fund (IMF) has approved a set of reforms for the Fund’s concessional lending facilities to better support Low Income Countries, LICs, to fight Cobvid-19.
The global body, announced, yesterday, that the board also approved an associated funding strategy to support the long term sustainability of the Poverty Reduction and Growth Trust, PRGT.
“These reforms are set to ensure that the Fund has the capacity to respond flexibly to LICs needs over the medium term while continuing to provide concessional loans at zero interest rates”, it said.
Fund lending to LICs increased dramatically in 2020, an eight fold increase from average lending levels in 2017-2019, and is projected to continue at elevated levels for several years, as LICs seek financial assistance to help them respond to and recover from the pandemic.
IMF said the bulk of future financial assistance would be provided through multi-year lending arrangements which represented a shift from 2020, when most assistance was provided through the Fund’s emergency financial facilities.
