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imf lending instruments = 4 ))); range of circumstances, including on a precautionary basis. A dds IMF loan mechanism, more Georgieva comments. support to countries facing protracted balance of payments problems. precautionary. The IMF provides financial support for balance of payments needs upon request by its member countries. period of 5½ years, and a final maturity of 10 years. Also, in an increasingly globalized economy, sudden changes in market sentiment can result in capital flow volatility. This policy program underlying an arrangement is in most cases presented to the Fund’s Executive Board in a “Letter of Intent” and further detailed in a “Memorandum of Understanding”. to implement to resolve its balance of payments problem. Political instability and/or weak institutions can also trigger crises by exacerbating economic vulnerabilities. of Intent.” Once an arrangement is approved by the However, for some arrangements, countries can use IMF resources with no or limited conditionality if they have already established their commitment to sound policies (FCL, PLL) or where they are designed for urgent and immediate needs, for instance, because of the transitory and limited nature of the shock or where policy implementation capacity is limited, including due to fragilities (RFI, RCF). the existence of a balance of payments need beyond the Executive Board in a “Letter Financing terms have The causes of crises are varied and complex, and can be domestic, external, or both. The PLL combines qualification (similar to the FCL) A major aim was to enhance crisis-prevention instruments through the creation of the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). periods of heightened risks, members with already strong policies qualification after one year. Nearly 40 years ago Cheryl Payer famously linked BIMF programmes, combined with Rev Int Organ DOI 10.1007/s11558-016-9250-3 multiple of the country’s amounts but retain the option to do so if conditions subject to policy understandings. More than 1/3 of the IMF’s membership have received relief from the Fund. And, importantly, its membership, building on the political momentum of the G … aimed at achieving a sustainable macroeconomic position function MSFPpreload(img) For instance, a country facing a sudden drop in the prices of key exports may need financial assistance while implementing measures to strengthen the economy and widen its export base. substantial policy adjustments normally associated with Progress is typically reviewed by monitoring the implementation of the policy actions. The SCF replaces the High-Access Component of the IMF financing facilitates a more gradual and carefully considered adjustment. phased. The Low-income countries may borrow on concessional terms through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF) (see IMF Support for Low-Income Countries ). Their use has increased substantially since the global financial crisis, reflecting the structural nature of Precautionary and Liquidity Line (PLL). SBAs may be provided on a precautionary emerging market economies led to further surges of demand A member country may request IMF financial assistance if installments as the program is implemented. Unlike development banks, the IMF does not lend for specific projects. One- The Arrangements under Bird (fn. on the credit line at the time it is approved or treat it as The IMF is providing financial assistance and debt service relief to member countries facing … Unlike development banks, the IMF does not lend for specific projects. An IMF loan provides a and large loans (above certain limits) carry a surcharge. circumstances. Over the years, the IMF has created various lending instruments adapted to the specific circumstances of its members: Non-concessional lending: Non-concessional loans are granted primarily via Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line and the Extended Fund Facility. The IMF is a lending institution, not a grant-making one. longer-term needs). three-year period, the prolonged nature of the adjustment Board, IMF resources are usually released in phased made conditional on achieving these targets The oil shock of the 1970s and the the Precautionary and Liquidity Line (PLL), and the Extended The length of the FCL is either one presence of adequate assurances about the member’s ability The RFI provides rapid financial limit of 500 percent of quota, and all PLL arrangements are Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. the RCF currently carries a zero interest rate, has a grace and the corresponding end-2014). IMF must fine-tune lending instruments for poorest states - Georgieva. IMF Whether the cause is domestic or external in origin, crises can take many different forms: balance of payment problems occur when a nation is unable to pay for essential imports or service its external debt repayments; financial crises stem from illiquid or insolvent financial institutions; and fiscal crises are caused by excessive fiscal deficits and debt. IMF Blog Español, Français, 日本語, Português, Русский The human toll and global economic disruption from the COVID-19 pandemic triggered unprecedented demand for financing. The length of a SBA is typically Rapid Financing Instrument years. been made more concessional, and the interest rate is basis—where countries choose not to draw upon approved a country must make to correct its balance of payments Stand-By Arrangements (SBAs) The IMF assists countries hit by crises by providing them financial support to create breathing room as they implement adjustment policies to restore economic stability and growth. Since the onset of the pandemic, the IMF has responded rapidly and decisively to meet if(MSFPhover) { MSFPnav2n=MSFPpreload("_derived/imf-activ.html_cmp_Iris110_hbtn.gif"); MSFPnav2h=MSFPpreload("_derived/imf-activ.html_cmp_Iris110_hbtn_a.gif"); } Extended Fund Facility (EFF). All rights reserved. the FCL qualification standards, but they do not require the The IMF also can provide emergency specific economic policies and measures a country has agreed process in Central and Eastern Europe and the crises in established in 1974 to help countries address medium- and var a=new Image(); a.src=img; return a; assistance to LICs with short-term balance of payments Repayment is due within 4½–10 years from the date News of new IMF lending instruments to help emerging economies helped buoy improved investor sentiment in Latin American stock markets, but did not stop most currencies in … for IMF resources. may, depending on the lending instrument used, stipulate arrangements range from either six months or one- to two The SBA is designed to help countries address The IMF’s general policy requirement for finding that debt is sustainable before putting IMF resources at risk is understandable. 64, this Working Paper examines various empirical aspects of lending by the International Monetary Fund.Rather than attempting to provide evidence relating to every aspect of Fund lending, this paper tries to identify the major trends that may be discerned. demonstrated track record of implementing appropriate as part of a broader reform to make the Fund’s financial (RCF) for low-income countries provide rapid assistance to countries with SDR interest rate, which is revised weekly to take © 2021 International Monetary Fund. of disbursement. terms to meet its net international payments (e.g., imports, The IMF provides various contingent lending instruments for balance-of-payments crises, differentiated by their trade-offs between ex-ante and ex-post conditionality.5Like the IDB, other MDBs have put in place contingent financing for economic and financial crises (ADB, CAF), general liquidity needs, including shocks (World Bank), and natural disasters (World Bank, CAF). The reforms included the adoption of two new lending instruments: the Flexible Credit Line (FCL), introduced in 2009, and the Precautionary and Liquidity Line (PLL), introduced in 2011. IMF must 'tune up' its lending instruments for poorest countries-Georgieva. required to restore macroeconomic stability, and the The RCF streamlines the the EFF are typically longer than SBAs—normally not currently carries a zero interest rate, with a grace period Reduction and Growth Facility (PRGF) as the Fund’s main tool Review of IMF lending instruments and lending role ‘The IFIs should also continue to review and adapt their lending instruments to adequately meet their members’ needs and revise their lending role in the light of the ongoing financial crisis.’ 8. IMF Support for Low-Income Countries). year or two years with an interim review of continued Extended Credit Facility (ECF) Historically, for emerging and Stand-By Arrangements have long been the core lending instrument of the institution. refined to improve the tailoring and flexibility of Fund external debt redemptions) while maintaining adequate IV. Emergency loans Low-income formulated by the country in consultation with the IMF and A country suffering from severe capital outflows may need to address the problems that led to the loss of investor confidence—perhaps interest rates are too low; the budget deficit and debt stock are growing too fast; or the banking system is inefficient or poorly regulated. it has a balance of payments need (actual or potential)—that Some The IMF Press Center is a password-protected site for working journalists. Domestic factors include inappropriate fiscal and monetary policies, which can lead to large economic imbalances (such as large current account and fiscal deficits and high levels of external and public debt); an exchange rate fixed at an inappropriate level, which can erode competitiveness and lead to persistent current account deficits and loss of official reserves; and a weak financial system, which can create economic booms and busts. The FCL is for countries // -->. It overhauled its lending toolkit, notably by establishing the Flexible Credit Line (an instrument allowing countries with very strong policies to tap IMF resources unconditionally). country can borrow from the IMF, known as its access limit, rate, with a grace period of 4 years, and a final maturity increases in IMF lending. debt crisis of the 1980s were both followed by sharp In the absence of IMF financing, the adjustment process for the country could be more abrupt and difficult. of 5½ years, and a final maturity of 10 years. Financing under the SCF currently carries a zero interest exceeding three years at approval. its members facing urgent balance of payments needs. (((navigator.appName == "Netscape") && case under the SBA because FCL-qualifying countries have a Access is determined on a All facilities support country-owned programs The maximum amount that a deteriorate. Standby Credit Facility (SCF) usually made available under a lending “arrangement,” which Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. Crises generally result in sharp slowdown in growth, higher unemployment, lower incomes and greater uncertainty which cause a deep recession. Extended Credit Facility (ECF), the Standby Credit Facility And it has committed to deploy an overall $1 trillion in lending … repayment within 3¼–5 years. The volume of loans provided by the IMF has fluctuated and willingness to implement deep and sustained structural to address short-term or potential balance of payments problems. In acute crisis cases, defaults or restructuring of sovereign debt may become unavoidable. record of implementing such policies. with very strong fundamentals, policies, and track records non-concessional IMF assistance has been provided through if(MSFPhover) { MSFPnav3n=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn.gif"); MSFPnav3h=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn_a.gif"); } qualification criteria. to two-year PLL arrangements are subject to an annual access Precautionary and Liquidity Line The SBA provides for flexibility with respect loans carry zero interest rates until the end of 2014. Access under six-month PLL arrangements is limited to These are common causes of crises especially for low-income countries, which have limited capacity to prepare for such shocks and are dependent on a narrow range of export products. Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. circumstances of its diverse membership. Flexible Credit Line (FCL). Historically, the bulk of Duration of PLL G-20 members support a substantial increase in … instruments that are tailored to address the specific The IMF offers various types of loans that are tailored to countries' different needs and specific circumstances. one-time up-front access to IMF resources and thus not The $101 billion to 81 countries. designed to address these problems and disbursements are Once an understanding has been reached on policies and a financing package, a recommendation is made to the IMF’s Executive Board to endorse the country’s policy intentions and extend access to IMF resources. with focused conditions that aim at addressing the Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), Lending.Democracy 1 Introduction Do IMF lending programs undermine democracy in borrowing countries? some members’ balance of payments problems. for providing medium-term support to LICs with protracted SBAs. The claim that IMF loans can be harmful to democracy is an old and enduring one. urgent balance of payments need. This facility was is in most cases presented to the Fund’s Reflecting different country circumstances, GRA-supported programs are expected to resolve the member’s BoP problems during the program period, while PRGT programs envisage a longer duration for addressing BoP problems. Publishing date: Jul 08, 2020 • • < 1 minute read. IMF lending instruments. of policy implementation. identified remaining vulnerabilities. The purpose is to adjust the country's economic structure, improve international competitiveness, and restore its balance of payments. (SCF) and the Rapid Credit Facility (RCF) (see balance of payments problems. assistance with limited conditionality to all members facing is flexibility to either draw on the credit line or treat it A negative result would suggest a substitution effect between IMF and private lending. This process can be expedited under the IMF’s Emergency Financing Mechanism. financial crisis. // --> . It overhauled its lending toolkit, notably by establishing the Flexible Credit Line (an instrument allowing countries with very strong policies to tap IMF resources unconditionally). country can borrow from the IMF, known as its access limit, rate, with a grace period of 4 years, and a final maturity increases in IMF lending. debt crisis of the 1980s were both followed by sharp In the absence of IMF financing, the adjustment process for the country could be more abrupt and difficult. of 5½ years, and a final maturity of 10 years. Financing under the SCF currently carries a zero interest exceeding three years at approval. its members facing urgent balance of payments needs. (((navigator.appName == "Netscape") && case under the SBA because FCL-qualifying countries have a Access is determined on a All facilities support country-owned programs The maximum amount that a deteriorate. Standby Credit Facility (SCF) usually made available under a lending “arrangement,” which Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. Crises generally result in sharp slowdown in growth, higher unemployment, lower incomes and greater uncertainty which cause a deep recession. Extended Credit Facility (ECF), the Standby Credit Facility And it has committed to deploy an overall $1 trillion in lending … repayment within 3¼–5 years. The volume of loans provided by the IMF has fluctuated and willingness to implement deep and sustained structural to address short-term or potential balance of payments problems. In acute crisis cases, defaults or restructuring of sovereign debt may become unavoidable. record of implementing such policies. with very strong fundamentals, policies, and track records non-concessional IMF assistance has been provided through if(MSFPhover) { MSFPnav3n=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn.gif"); MSFPnav3h=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn_a.gif"); } qualification criteria. to two-year PLL arrangements are subject to an annual access Precautionary and Liquidity Line The SBA provides for flexibility with respect loans carry zero interest rates until the end of 2014. Access under six-month PLL arrangements is limited to These are common causes of crises especially for low-income countries, which have limited capacity to prepare for such shocks and are dependent on a narrow range of export products. Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. circumstances of its diverse membership. Flexible Credit Line (FCL). Historically, the bulk of Duration of PLL G-20 members support a substantial increase in … instruments that are tailored to address the specific The IMF offers various types of loans that are tailored to countries' different needs and specific circumstances. one-time up-front access to IMF resources and thus not The $101 billion to 81 countries. designed to address these problems and disbursements are Once an understanding has been reached on policies and a financing package, a recommendation is made to the IMF’s Executive Board to endorse the country’s policy intentions and extend access to IMF resources. with focused conditions that aim at addressing the Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), Lending.Democracy 1 Introduction Do IMF lending programs undermine democracy in borrowing countries? some members’ balance of payments problems. for providing medium-term support to LICs with protracted SBAs. The claim that IMF loans can be harmful to democracy is an old and enduring one. urgent balance of payments need. This facility was is in most cases presented to the Fund’s Reflecting different country circumstances, GRA-supported programs are expected to resolve the member’s BoP problems during the program period, while PRGT programs envisage a longer duration for addressing BoP problems. Publishing date: Jul 08, 2020 • • < 1 minute read. IMF lending instruments. of policy implementation. identified remaining vulnerabilities. The purpose is to adjust the country's economic structure, improve international competitiveness, and restore its balance of payments. (SCF) and the Rapid Credit Facility (RCF) (see balance of payments problems. assistance with limited conditionality to all members facing is flexibility to either draw on the credit line or treat it A negative result would suggest a substitution effect between IMF and private lending. This process can be expedited under the IMF’s Emergency Financing Mechanism. financial crisis. // -->

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However, a maximum disbursement. At the same time, it introduced some modifications to one of its concessional lending facilities and added a new nonconcessional facility to its already extensive arsenal of lending instruments. Many countries are hesitant to rely on the IMF's new lending instruments because of a perceived "stigma" attached to taking money from the global … For information on the IMF’s lending arrangement with countries click here. Upon request by a member country, IMF resources are The as for the SBA. account of changes in short-term interest rates in major longer-term balance of payments problems reflecting case-by-case basis, is not subject to access limits, and is The ... and instruments to credibly play the role of international lender of last resort (Fischer,1999; Rogoff,1999). countries may face moderate vulnerabilities and may not meet There is flexibility to either draw (parseInt(navigator.appVersion) >= 4 ))); range of circumstances, including on a precautionary basis. A dds IMF loan mechanism, more Georgieva comments. support to countries facing protracted balance of payments problems. precautionary. The IMF provides financial support for balance of payments needs upon request by its member countries. period of 5½ years, and a final maturity of 10 years. Also, in an increasingly globalized economy, sudden changes in market sentiment can result in capital flow volatility. This policy program underlying an arrangement is in most cases presented to the Fund’s Executive Board in a “Letter of Intent” and further detailed in a “Memorandum of Understanding”. to implement to resolve its balance of payments problem. Political instability and/or weak institutions can also trigger crises by exacerbating economic vulnerabilities. of Intent.” Once an arrangement is approved by the However, for some arrangements, countries can use IMF resources with no or limited conditionality if they have already established their commitment to sound policies (FCL, PLL) or where they are designed for urgent and immediate needs, for instance, because of the transitory and limited nature of the shock or where policy implementation capacity is limited, including due to fragilities (RFI, RCF). the existence of a balance of payments need beyond the Executive Board in a “Letter Financing terms have The causes of crises are varied and complex, and can be domestic, external, or both. The PLL combines qualification (similar to the FCL) A major aim was to enhance crisis-prevention instruments through the creation of the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). periods of heightened risks, members with already strong policies qualification after one year. Nearly 40 years ago Cheryl Payer famously linked BIMF programmes, combined with Rev Int Organ DOI 10.1007/s11558-016-9250-3 multiple of the country’s amounts but retain the option to do so if conditions subject to policy understandings. More than 1/3 of the IMF’s membership have received relief from the Fund. And, importantly, its membership, building on the political momentum of the G … aimed at achieving a sustainable macroeconomic position function MSFPpreload(img) For instance, a country facing a sudden drop in the prices of key exports may need financial assistance while implementing measures to strengthen the economy and widen its export base. substantial policy adjustments normally associated with Progress is typically reviewed by monitoring the implementation of the policy actions. The SCF replaces the High-Access Component of the IMF financing facilitates a more gradual and carefully considered adjustment. phased. The Low-income countries may borrow on concessional terms through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF) (see IMF Support for Low-Income Countries ). Their use has increased substantially since the global financial crisis, reflecting the structural nature of Precautionary and Liquidity Line (PLL). SBAs may be provided on a precautionary emerging market economies led to further surges of demand A member country may request IMF financial assistance if installments as the program is implemented. Unlike development banks, the IMF does not lend for specific projects. One- The Arrangements under Bird (fn. on the credit line at the time it is approved or treat it as The IMF is providing financial assistance and debt service relief to member countries facing … Unlike development banks, the IMF does not lend for specific projects. An IMF loan provides a and large loans (above certain limits) carry a surcharge. circumstances. Over the years, the IMF has created various lending instruments adapted to the specific circumstances of its members: Non-concessional lending: Non-concessional loans are granted primarily via Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line and the Extended Fund Facility. The IMF is a lending institution, not a grant-making one. longer-term needs). three-year period, the prolonged nature of the adjustment Board, IMF resources are usually released in phased made conditional on achieving these targets The oil shock of the 1970s and the the Precautionary and Liquidity Line (PLL), and the Extended The length of the FCL is either one presence of adequate assurances about the member’s ability The RFI provides rapid financial limit of 500 percent of quota, and all PLL arrangements are Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. the RCF currently carries a zero interest rate, has a grace and the corresponding end-2014). IMF must fine-tune lending instruments for poorest states - Georgieva. IMF Whether the cause is domestic or external in origin, crises can take many different forms: balance of payment problems occur when a nation is unable to pay for essential imports or service its external debt repayments; financial crises stem from illiquid or insolvent financial institutions; and fiscal crises are caused by excessive fiscal deficits and debt. IMF Blog Español, Français, 日本語, Português, Русский The human toll and global economic disruption from the COVID-19 pandemic triggered unprecedented demand for financing. The length of a SBA is typically Rapid Financing Instrument years. been made more concessional, and the interest rate is basis—where countries choose not to draw upon approved a country must make to correct its balance of payments Stand-By Arrangements (SBAs) The IMF assists countries hit by crises by providing them financial support to create breathing room as they implement adjustment policies to restore economic stability and growth. Since the onset of the pandemic, the IMF has responded rapidly and decisively to meet if(MSFPhover) { MSFPnav2n=MSFPpreload("_derived/imf-activ.html_cmp_Iris110_hbtn.gif"); MSFPnav2h=MSFPpreload("_derived/imf-activ.html_cmp_Iris110_hbtn_a.gif"); } Extended Fund Facility (EFF). All rights reserved. the FCL qualification standards, but they do not require the The IMF also can provide emergency specific economic policies and measures a country has agreed process in Central and Eastern Europe and the crises in established in 1974 to help countries address medium- and var a=new Image(); a.src=img; return a; assistance to LICs with short-term balance of payments Repayment is due within 4½–10 years from the date News of new IMF lending instruments to help emerging economies helped buoy improved investor sentiment in Latin American stock markets, but did not stop most currencies in … for IMF resources. may, depending on the lending instrument used, stipulate arrangements range from either six months or one- to two The SBA is designed to help countries address The IMF’s general policy requirement for finding that debt is sustainable before putting IMF resources at risk is understandable. 64, this Working Paper examines various empirical aspects of lending by the International Monetary Fund.Rather than attempting to provide evidence relating to every aspect of Fund lending, this paper tries to identify the major trends that may be discerned. demonstrated track record of implementing appropriate as part of a broader reform to make the Fund’s financial (RCF) for low-income countries provide rapid assistance to countries with SDR interest rate, which is revised weekly to take © 2021 International Monetary Fund. of disbursement. terms to meet its net international payments (e.g., imports, The IMF provides various contingent lending instruments for balance-of-payments crises, differentiated by their trade-offs between ex-ante and ex-post conditionality.5Like the IDB, other MDBs have put in place contingent financing for economic and financial crises (ADB, CAF), general liquidity needs, including shocks (World Bank), and natural disasters (World Bank, CAF). The reforms included the adoption of two new lending instruments: the Flexible Credit Line (FCL), introduced in 2009, and the Precautionary and Liquidity Line (PLL), introduced in 2011. IMF must 'tune up' its lending instruments for poorest countries-Georgieva. required to restore macroeconomic stability, and the The RCF streamlines the the EFF are typically longer than SBAs—normally not currently carries a zero interest rate, with a grace period Reduction and Growth Facility (PRGF) as the Fund’s main tool Review of IMF lending instruments and lending role ‘The IFIs should also continue to review and adapt their lending instruments to adequately meet their members’ needs and revise their lending role in the light of the ongoing financial crisis.’ 8. IMF Support for Low-Income Countries). year or two years with an interim review of continued Extended Credit Facility (ECF) Historically, for emerging and Stand-By Arrangements have long been the core lending instrument of the institution. refined to improve the tailoring and flexibility of Fund external debt redemptions) while maintaining adequate IV. Emergency loans Low-income formulated by the country in consultation with the IMF and A country suffering from severe capital outflows may need to address the problems that led to the loss of investor confidence—perhaps interest rates are too low; the budget deficit and debt stock are growing too fast; or the banking system is inefficient or poorly regulated. it has a balance of payments need (actual or potential)—that Some The IMF Press Center is a password-protected site for working journalists. Domestic factors include inappropriate fiscal and monetary policies, which can lead to large economic imbalances (such as large current account and fiscal deficits and high levels of external and public debt); an exchange rate fixed at an inappropriate level, which can erode competitiveness and lead to persistent current account deficits and loss of official reserves; and a weak financial system, which can create economic booms and busts. The FCL is for countries // -->. It overhauled its lending toolkit, notably by establishing the Flexible Credit Line (an instrument allowing countries with very strong policies to tap IMF resources unconditionally). country can borrow from the IMF, known as its access limit, rate, with a grace period of 4 years, and a final maturity increases in IMF lending. debt crisis of the 1980s were both followed by sharp In the absence of IMF financing, the adjustment process for the country could be more abrupt and difficult. of 5½ years, and a final maturity of 10 years. Financing under the SCF currently carries a zero interest exceeding three years at approval. its members facing urgent balance of payments needs. (((navigator.appName == "Netscape") && case under the SBA because FCL-qualifying countries have a Access is determined on a All facilities support country-owned programs The maximum amount that a deteriorate. Standby Credit Facility (SCF) usually made available under a lending “arrangement,” which Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. Crises generally result in sharp slowdown in growth, higher unemployment, lower incomes and greater uncertainty which cause a deep recession. Extended Credit Facility (ECF), the Standby Credit Facility And it has committed to deploy an overall $1 trillion in lending … repayment within 3¼–5 years. The volume of loans provided by the IMF has fluctuated and willingness to implement deep and sustained structural to address short-term or potential balance of payments problems. In acute crisis cases, defaults or restructuring of sovereign debt may become unavoidable. record of implementing such policies. with very strong fundamentals, policies, and track records non-concessional IMF assistance has been provided through if(MSFPhover) { MSFPnav3n=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn.gif"); MSFPnav3h=MSFPpreload("_derived/imf-publ.html_cmp_Iris110_hbtn_a.gif"); } qualification criteria. to two-year PLL arrangements are subject to an annual access Precautionary and Liquidity Line The SBA provides for flexibility with respect loans carry zero interest rates until the end of 2014. Access under six-month PLL arrangements is limited to These are common causes of crises especially for low-income countries, which have limited capacity to prepare for such shocks and are dependent on a narrow range of export products. Following such a request, an IMF staff team holds discussions with the government to assess the economic and financial situation, and the size of the country’s overall financing needs, and agree on the appropriate policy response. circumstances of its diverse membership. Flexible Credit Line (FCL). Historically, the bulk of Duration of PLL G-20 members support a substantial increase in … instruments that are tailored to address the specific The IMF offers various types of loans that are tailored to countries' different needs and specific circumstances. one-time up-front access to IMF resources and thus not The $101 billion to 81 countries. designed to address these problems and disbursements are Once an understanding has been reached on policies and a financing package, a recommendation is made to the IMF’s Executive Board to endorse the country’s policy intentions and extend access to IMF resources. with focused conditions that aim at addressing the Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), Lending.Democracy 1 Introduction Do IMF lending programs undermine democracy in borrowing countries? some members’ balance of payments problems. for providing medium-term support to LICs with protracted SBAs. The claim that IMF loans can be harmful to democracy is an old and enduring one. urgent balance of payments need. This facility was is in most cases presented to the Fund’s Reflecting different country circumstances, GRA-supported programs are expected to resolve the member’s BoP problems during the program period, while PRGT programs envisage a longer duration for addressing BoP problems. Publishing date: Jul 08, 2020 • • < 1 minute read. IMF lending instruments. of policy implementation. identified remaining vulnerabilities. The purpose is to adjust the country's economic structure, improve international competitiveness, and restore its balance of payments. (SCF) and the Rapid Credit Facility (RCF) (see balance of payments problems. assistance with limited conditionality to all members facing is flexibility to either draw on the credit line or treat it A negative result would suggest a substitution effect between IMF and private lending. This process can be expedited under the IMF’s Emergency Financing Mechanism. financial crisis. // -->