WASHINGTON: The International Monetary Fund’s (IMF) executive board has approved a number policy reforms to the concessional lending facilities to better support the recovery of low-income countries (LICs) from the Covid-19 pandemic. The key points of the policy reforms that were approved by the IMF executive board last week is a 45 percent increase in the normal limits on access to concessional financing, coupled with the elimination of hard limits on access for the poorest countries, according to report.
Sean Nolan, deputy director of the IMF's strategy policy and review department, told before media that - "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," the IMF said on Thursday in a statement. "The decision to raise access limits is not a directive to lend more across all IMF programs." It also highlighted that It provides the flexibility to provide more zero-interest financing for countries with strong economic programs to handle the pandemic and the path to full recovery.
The IMF executive board also approved a two-stage funding strategy to cover the cost of pandemic-related concessional lending and support the sustainability of the Poverty Reduction and Growth Trust (PRGT), which is tailored to the diverse needs of low-income countries.