The IMF has agreed to use its net income and reserves to generate around Eight billion Dollars in additional subsidy resources for the Poverty Reduction and Growth Trust (PRGT) over the next five years.
A statement issued by the IMF Press Centre said this was the outcome of the fund’s Executive Board Review of PRGT Facilities and Financing on Friday.
It said the PRGT is the IMF’s vehicle for providing concessional financing to low-income member countries.
The statement said following the outcome of the meeting, Ms Kristalina Georgieva, Managing Director of the IMF, issued the following statement.
“Our membership today has adopted a comprehensive reform and financing package for the PRGT to bolster the IMF’s support to low-income countries.
“The package includes a framework to deploy IMF net income and/or reserves to generate about eight billion Dollars in additional subsidy resources for the PRGT over the next five years.
“Combined with other reform measures and last year’s successful bilateral fundraising, this would increase the PRGT’s long-term annual lending envelope to about 3.6 billion Dollars.
“This is more than twice the pre-pandemic level, and helps catalyse significant additional flows from public and private sources.
“This agreement comes at a critical time as low-income countries have suffered a series of unprecedented shocks and face substantial financing needs.”
Georgieva said the approved package would generate the concessional resources to ensure the fund continued to support low-income countries to implement sound policies and build strong institutions.
She said the reforms would help tailor IMF support to country-specific needs, recognising the increasing economic heterogeneity of low-income countries.
“ To ensure that scarce concessional resources are targeted to those most in need, a new interest rate mechanism will maintain interest-free lending for the poorest countries.
“This will be done while ensuring that lending terms for others have a sufficient degree of concessionality.
“Access policies will allow for flexibility in calibrating fund support, and safeguards will be strengthened and streamlined.
“Our global membership has demonstrated once again its shared commitment to support our low-income members in challenging economic times,” she said. (NAN)
