The International Monetary Fund (IMF) has extended its flexible access to emergency funding for an additional 18 months to help countries that are severely affected by the COVID-19, and due to increasing case of the new variant omicron around the world.
The Washington-based crisis lender’s executive board agreed to “temporarily increase the cumulative access limits under its emergency financing instruments” through June 2023.
The IMF first launched its emergency financing instruments such as the Rapid Credit Facility (RCF), Rapid Financing Instrument (RFI) and RCF’s Large Natural Disaster (LND) when the first wave of coronavirus hit, in April 2020, and raised the level of funding that countries could obtain.
The programs have already been extended twice, in September 2020 and again in March 2021. The board also agreed that “all other access limits” which had been temporarily increased will be reduced to their pre-pandemic levels beginning from January 1st, 2022 as scheduled.
The IMF’s executive board has reintroduced the 12-month limit on RCF disbursements and endorsed staff’s proposal to create an exit strategy from the temporary increase in cumulative access limits under emergency lending instruments by the end of June 2023.
The new development comes after the IMF announced earlier this week that 25 low-income countries will receive $115 million in debt relief from January 11 to April 13 next year, in an effort to assist them in pandemic-related challenges.
The decision assures that member nations can continue to access the Fund’s emergency financing if they have urgent balance-of-payments (BoP) needs to arise when an upper-credit-tranche (UCT)-quality arrangement is either not necessary or not feasible.
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