IMF Board Approves Lending Reforms To Better Support Low-Income Countries
- The International Monetary Fund on Thursday said it would revamp its concessional lending programs to better support low-income countries during the COVID-19 pandemic and recovery, and raised the prospect of limited sales of IMF gold to boost its lending capability.
- The IMF said its executive board last week backed reforms that include raising the access limits for concessional financing for low-income countries by 45%; eliminating access limits for the poorest countries with eligible programs; and maintaining zero-percent interest rates on such loans.
- To boost the lending capacity of its Poverty Reduction and Growth Trust, the IMF said it would seek an additional $18 billion in coming years from member countries, on top of some $24 billion already raised since the start of the crisis, plus $4 billion in subsidies to support zero-percent interest rates.
- Richer member countries could channel their existing and new Special Drawing Rights emergency reserves to raise the funds, the IMF said, adding that the expected approval of a $650 billion increase in the IMF's SDR allocation this August could help facilitate the fund-raising process.