DUSHANBE, April 27, 2009, Asia-Plus — The Executive Board of the International Monetary Fund (IMF) has agreed to double the borrowing limits of the poorest countries under the Poverty Reduction and Growth Facility (PRGF) and Exogenous Shocks Facility (ESF) arrangements to help low-income countries severely affected by the global economic downturn, press release issued by the IMF on April 23 said.
The Executive Board also began discussions last week on options for raising additional resources for concessional lending to allow the Fund to scale up its capacity to assist low-income countries (LICs) over the medium term. These discussions stem from recent proposals discussed, among others, by the leaders at the London G-20 Summit. In the lead up to these discussions, the Board agreed that doubling of access limits for low-income countries is in line with the sharp increase in demand for concessional IMF financing by LICs, and also follows upon a recent increase in access limits for lending financed from the IMF’s General Resources Account.
“This reform represents a significant step up in the Fund’s support for its low-income member countries—which is especially needed in this global crisis,” said IMF Managing Director Dominique Strauss-Kahn. “The increased flexibility and the additional resources enable us to better meet the needs of the world’s poorest countries, which have been severely hit by the global downturn.”
“For most of this decade, low-income countries have been growing strongly, with declining inflation and reduced debt burdens,” Mr. Strauss-Kahn said. “But, over the past two years, they have been hit by a series of shocks, beginning with the escalation in food and fuel prices and now the global crisis.”
“Over the past year, the Fund has significantly increased its support to low-income countries to help them respond to these shocks—almost doubling the volume of our concessional lending last year, with a further substantial increase expected this year,” he added.
According to IMF’s note, 78 countries and territories count as deserving such a support. Among them are Azerbaijan, Armenia, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan.
We will recall that the Executive Board of the International Monetary Fund (IMF) on April 21 approved a three-year, SDR 78.3 million (about US$116 million) arrangement under the Poverty Reduction and Growth Facility (PRGF) for Tajikistan to support the authorities” economic program. The decision will enable Tajikistan to draw the equivalent of SDR 26.1 million (about US$38.7 million) from the IMF immediately.
