July 8, 2015/IMF

Executive Summary

 Access to Fund financial resources provides a financial safety net to help countries manage adverse shocks, acting as a potential supplement to foreign reserves when there is a balance of payments need. Such support is especially important to developing countries with limited capacity to borrow in domestic or foreign markets.

This paper proposes a set of measures that would expand access to Fund resources for developing countries, as one of the initiatives the Fund is undertaking as part of the wider effort of the international community to support countries in pursuing the post-2015 Sustainable Development Goals (SDGs).

The key measures include:

a) Raising access norms, annual and cumulative normal access limits by 50 percent across the concessional facilities for all PRGT-eligible countries, addressing the erosion of access levels relative to trade, capital flows, and GDP since 2009–10;

b) Rebalancing the funding mix of concessional to non-concessional financing under blended arrangements from 1:1 to 1:2 for PRGT-eligible countries that receive financial support from the Fund in the form of a blend of concessional and non-concessional financing, recognizing that these countries typically have significantly greater access to market funding than envisaged when the current facilities were established; and

c) Increasing access to fast-disbursing support under the RCF (to PRGT-eligible countries) and RFI (to all member countries) to assist countries in fragile situations, hit by conflict, or natural disasters; and increasing the level of concessionality of such support to PRGT-eligible countries by setting the interest rate on RCF loans at zero percent.

PRGT-eligible countries are those eligible to receive concessional financing from the Poverty Reduction and Growth Trust (currently 73 in number).