Policy Papers

Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic

Publication Date:

July 22, 2021

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This paper proposes a package of policy reforms and a funding strategy to ensure that the Fund has the capacity to respond flexibly to LICs’ needs during the pandemic and recovery. The key policy reforms proposed include: • raising the normal annual/cumulative limits on access to PRGT resources to 145/435 percent of quota, the same thresholds for normal access in the GRA; • eliminating the hard limits on exceptional access (EA) to PRGT resources for the poorest LICs, enabling them to obtain all financing on concessional terms if the EA criteria are met; • changes to the framework for blending concessional and non-concessional resources to make it more robust and less complex; • stronger safeguards to address concerns regarding debt sustainability and capacity to repay the Fund; and • retaining zero interest rates on PRGT loans, consistent with the established rules for setting these interest rates.

Series:

Policy Paper No. 2021/053

Subject:

Concessional external borrowing COVID-19 Credit External debt Financial institutions Health Income Loans Monetary policy Money National accounts Political economy

Frequency:

occasional