RIYADH: In a bid to help members tide over the challenging economic environment, the Executive Board of the International Monetary Fund agreed to temporarily increase the limits on their annual and cumulative access to its resources in the General Resources Account.
While the annual limit in the GRA was raised from 145 percent to 200 percent of the member country’s quota, the cumulative limit was increased from 435 percent to 600 percent of quota for a period of 12 months, according to a statement.
Access to resources beyond these limits is subject to the requirements of the IMF’s exceptional access framework.
These moves are aimed at providing member countries, particularly emerging markets and developing economies, which face increased financing pressures to access with higher IMF financial support without triggering the exceptional access framework.
The measure follows permission last month for five development lenders to use their reserves to help poor or less unfortunate countries.
If necessary, before the end of the 12-month period IMF staff is likely to re-engage the Executive Board on a proposal to maintain for longer the higher GRA access limits.
Moreover, IMF’s Executive Board also reviewed possible changes in access limits under the Poverty Reduction and Growth Trust, which is the concessional financing arm of the international lender.
Concessional financing refers to the below market rate finance provided by major financial institutions such as development banks as well as multilateral funds to help assist developing countries in supporting their development goals.
PRGT access limits were last raised by 45 percent in 2021. According to the IMF, the demand for the PRGT resources has increased sharply and is expected to further grow in light of successive shocks.
Once sufficient additional resources have been pledged to the PRGT, which currently faces a sizable subsidy resource gap, IMF is also likely to undertake a review of PRGT access limits.
