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Europe > Ukraine

You are looking at 1 - 10 of 12 items for :

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Cover Policy Papers
Policy Reform Proposals To Promote The Fund’s Capacity To Support Countries Undertaking Debt Restructuring
International Monetary Fund. Strategy, Policy, & Review Department
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Finance Dept.
A number of sovereign debt restructurings over the past three years faced significant delays but the cases are now moving forward. These delays slowed access of countries to much needed Fund financial support, and alongside creditors’ efforts the Fund had to find ways forward. With significant experience now gleaned from recent restructuring cases, it is important to extract the lessons for Fund policies from this episode. Delays in future Fund engagements need to be minimized where this can be done in a manner consistent with restoring the member to medium-term external viability and ensuring adequate safeguards for the Fund. Such delays can contribute to a deepening of debt distress, making adjustment more difficult, exacerbating the debt problem, and creating inefficiency costs for both the debtor and its creditors.
Keywords:
support countries undertaking debt restructuring; policy reform proposal; Fund policy; fund policy; draft Executive Board understanding; Debt restructuring; Arrears; Debt sustainability; Debt sustainability analysis; Emergency assistance; Global
Cover Policy Papers
Review of Experience with The Food Shock Window Under The Rapid Financing Instrument and The Rapid Credit Facility
International Monetary Fund. Finance Dept.
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Strategy, Policy, & Review Department
The Food Shock Window (FSW) under the Rapid Credit Facility (RCF) and the Rapid Financing Instrument (RFI) was approved in September 2022 for 12 months, as a complement to the tools used by the Fund to support the broader international effort to address the global food shock. The Fund has been working closely with partners to provide a coordinated international response to the global food shock, and has contributed through policy advice, technical assistance and lending. Where needed and possible, financial support to countries affected by the global food shock has been delivered by the IMF through multi-year Fund-supported programs The FSW complemented this support in situations where these programs were not feasible or not necessary. As the global food shock and associated balance of payment pressures are expected to continue throughout 2023, the IMF extended the FSW until end-March 2024 to allow the FSW to continue serving as a contingency tool. This extension will also provide sufficient time to observe if the FSW can lapse without limiting the capacity of the Fund to support its members. To ensure adequate borrowing space under the emergency financing limits for those countries that have received support through the FSW, the IMF also extended the additional 25 percent of quota added to the Cumulative Access Limit until end-2026 for countries that have accessed the Food Shock Window through the RFI and until the completion of the 2024/25 PRGT review for those that accessed the Food Shock Window through the RCF.
Keywords:
Cumulative Access Limits; Rapid Financing Instrument; Rapid Credit Facility; Food Insecurity; FSW request; FSW financing; UCT-quality program; FSW relative; FSW experience; FSW resource; Food security; Food prices; Emergency assistance; Balance of payments need; Global
Cover Policy Papers
Review of The Cumulative Access Limits Under The Rapid Financing Instrument and The Rapid Credit Facility
International Monetary Fund. Finance Dept.
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Strategy, Policy, & Review Department
The IMF extended the temporarily higher Cumulative Access Limits under the Fund’s Emergency Financing instruments, the Rapid Credit Facility (RCF) under the General Resources Account, and the Rapid Financing Instrument (RFI) under the Poverty Reduction and Growth Trust. This extension ensures that the Fund can continue to support member countries that accessed Fund’s emergency financing during COVID-19 pandemic in case of renewed emergency situations. The temporarily higher cumulative access limits under the RFI will be maintained until end-June 2024 when most RFI recipients will have repaid a significant part of their past emergency financing. The temporarily higher cumulative access limits under the RCF will be maintained until the completion of the 2024/25 comprehensive review of the Fund’s concessional facilities and financing, given the longer repayment schedule for RCF financing.
Keywords:
Cumulative Access Limits; Rapid Financing Instrument; Rapid Credit Facility; LND window; UCT-quality program; RCF ES window; FSW financing; RFI recipient; FSW relative; FSW experience; Emergency assistance; COVID-19; Balance of payments need; Credit; Global
Cover IMF Working Papers
Are We Heading for Another Debt Crisis in Low-Income Countries? Debt Vulnerabilities: Today vs the pre-HIPC Era
Chuku Chuku
,
Prateek Samal
,
Joyce Saito
,
Ms. Dalia S Hakura
,
Mr. Marcos d Chamon
,
Mr. Martin D. Cerisola
,
Guillaume Chabert
, and
Mr. Jeromin Zettelmeyer
There are growing concerns that 25 years after the launch of the HIPC debt relief initiative, many low-income countries are again facing high debt vulnerabilities. This paper compares debt vulnerabilities in LICs today versus those on the eve of the HIPC Initiative and examines challenges to a similarly designed debt-relief framework. While solvency and liquidity indicators in most LICs have steadily worsened in recent years, they remain substantially better on average than they were on the eve of HIPC in the mid-1990s. This said, if current trends persist, debt vulnerabilities in LICs could (but would not necessarily) reach levels comparable to the pre-HIPC era over the medium- to long-term. Today’s more complex creditor landscape makes coordination challenging. It is therefore essential for countries to reduce today’s debt burdens promptly through economic reform, lowering the cost of financing, and debt restructuring on a case-by-case basis. The international community should also step up efforts to improve debt restructuring processes, including the G20 Common Framework, to ensure that debt relief is delivered in a timely and efficient manner where it is needed.
Keywords:
Debt Vulnerabilities; Creditor Coordination; Debt Relief; Low-Income Countries; Debt Sustainability Analysis; HIPC; Debt Overhang; HIPC debt burden indicator; HIPC debt relief initiative; financing landscape; LICS financing Needs; debt vulnerability; MDRI debt relief; Debt burden; Debt sustainability; Debt service; Global
Cover Policy Papers
Changes to the Fund’s Financing Assurances Policy in the Context Of Fund Upper Credit Tranche (UCT) Financing Under Exceptionally High Uncertainty
International Monetary Fund. Strategy, Policy, & Review Department
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Finance Dept.
The Executive Board of the International Monetary Fund (IMF) approved changes to the Fund’s financing assurances policy. The changes apply in situations of exceptionally high uncertainty, involving exogenous shocks that are beyond the control of country authorities and the reach of their economic policies, and which generate larger than usual tail risks. The changes adopted could enable the design of a Fund Upper Credit Tranche (UCT) program in situations of exceptionally high uncertainty, in particular by modifying the Fund’s financing assurances policies in two ways. The first change allows official bilateral creditors to provide an upfront credible assurance about delivering debt relief and/or financing with the delivery of a contingent second-stage element of debt relief and/or financing once the exceptionally high uncertainty has been resolved. This would help establish that medium-term viability is being restored. The second change extends the use of a capacity-to-repay assurances from official bilateral creditors/donors from emergency financing to a UCT arrangement context. This would help establish adequate safeguards. These changes and their application to any specific country case in a situation of exceptionally high uncertainty would require the Fund to weigh whether it is prepared to accept the enterprise risks that such arrangement would entail.
Keywords:
Fund supported program; Exceptionally high uncertainty; financing assurances; debt relief; UCT program involvement; fund Upper Credit Tranche; UCT arrangement; UCT context; Fund arrangement; Debt sustainability; Emergency assistance; Global
Cover Policy Papers
Review Of The Adequacy Of The Fund’s Precautionary Balances
International Monetary Fund. Finance Dept.
On December 12, 2022, the IMF’s Executive Board reviewed the adequacy of the Fund’s precautionary balances. The review took place on the standard two-year cycle, after an interim review in December 2021. Precautionary balances comprise the Fund’s general and special reserves. They are a key element of the IMF’s multi-layered framework for managing financial risks. Precautionary balances provide a buffer to protect the Fund against potential losses, resulting from credit, income, and other financial risks. In conducting the review, the Executive Board applied the rules-based framework agreed in 2010. Precautionary balances have risen further since the 2021 interim review and coverage metrics have strengthened. At the same, credit and other financial risks have also increased. The pace of reserve accumulation is expected to remain adequate. Against this background, Executive Directors endorsed staff’s proposal to retain the current medium-term target of SDR 25 billion and the minimum floor of SDR 15 billion. The Board also discussed the role of surcharges, which are primarily a component of the Fund’s risk management framework but also contribute to reserves accumulation.
Keywords:
concentration risk; D. financial risks; risk management framework; Fund credit; transparency policy; fund financial risks; Income; Credit; Credit risk; Credit ratings; Emergency assistance; Global; Caribbean; Western Hemisphere
Cover Policy Papers
Proposal for a Staff-Monitored Program with Executive Board Involvement
International Monetary Fund. Finance Dept.
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Strategy, Policy, & Review Department
This paper proposes an amendment to the policy on Staff-Monitored Programs (SMPs) that would allow for limited Executive Board involvement in opining on the robustness of a member’s policies to meet their stated objectives under an SMP and monitoring its implementation. To differentiate from regular SMPs, such SMPs would be called “Program Monitoring with Board Involvement” or “PMBs”. Their use would be only available to those (requesting) members who, in addition to seeking to build or rebuild a track record for Upper Credit Tranche (UCT) Use of Fund Resources (UFR), would benefit from targeted Executive Board involvement because of either (i) an ongoing concerted international effort by creditors or donors to provide substantial new financing or debt relief to the member or (ii) significant outstanding Fund credit under emergency financing instruments at the time new emergency financing is received. Members meeting criterion (i) or (ii) above would be strongly encouraged to request such a PMB. The PMB would support members in designing, implementing, and monitoring policies under often complex circumstances.
Keywords:
emergency financing instrument; UCT-quality program; SMP policy; PMB criterion; UCT-quality instrument; PMB policy; urgent balance of payments; Emergency assistance; Balance of payments need; Food security; Debt relief; Global
Cover Policy Papers
Proposal for a Food Shock Window Under the Rapid Financing Instrument and Rapid Credit Facility
International Monetary Fund. Finance Dept.
,
International Monetary Fund. Legal Dept.
, and
International Monetary Fund. Strategy, Policy, & Review Department
Russia’s war in Ukraine has exacerbated global economic pressures, including through a food shock. The war and food-related spillovers—higher import prices for food and fertilizer and disruptions in supply lines for food importers, and a loss of revenue for some food exporters—add to urgent balance-of-payments (BOP) needs of many Fund members. They have also exacerbated acute food insecurity, now affecting 345 million people. While the best response to address BOP pressures would generally involve an Upper Credit Tranche-quality program, such a program may not be feasible in some cases or necessary in others. This paper proposes a time-bound food shock window under the Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF) to provide support to members in such situations. The new window would be temporary and provide low-access emergency financing that increases the amounts currently available under the RFI/RCF. Members would need to demonstrate urgent BOP needs and meet a set of qualification criteria related to the global food shock. The window would be available for 12 months from the date of Board approval of the window. Countries requesting financing under the window would also need to meet the standard qualification criteria under the RFI/RCF.
Keywords:
emergency financing instrument; UCT-quality program; emergency financing Access; SMP policy; Food shock window; urgent balance of payments; Emergency assistance; Balance of payments need; Food security; Agricultural commodities; Credit; Global
Cover Policy Papers
Streamlining Procedures for Board Consideration of The Fund’s Emergency Financing During Exceptional Circumstances Involving A Pandemic
International Monetary Fund
The COVID-19 pandemic has inflicted an unprecedented shock on the global economy and created an enormous demand for Fund resources. To accelerate processing and approval of members’ requests in such circumstances, the paper proposes measures to expedite Board consideration and approval of requests for purchases and/or disbursements under the Rapid Financing Instrument and/or the Rapid Credit Facility, respectively, completion of reviews and requests for changes in access in existing arrangements, and requests for assistance under the Catastrophe Containment and Relief Trust (CCRT), by shortening the circulation period for Board documents. The paper also proposes extending the use of the shortened circulation period to selected Article IV consultations necessary for use of Fund resources during a global pandemic. Management will also streamline internal procedures to accelerate program processing and reduce the burden on the Fund’s administrative capacity, and will seek the support of creditors to expedite the processing of financial transactions under COVID-19 emergency financing.
Keywords:
PP; pandemic; financing; emergency procedure; pandemic emergency procedures; RFI financing request; financing request; RFI request; emergency financing request; fund assistance; Emergency assistance; COVID-19; Lines of credit; Global
Cover IMF Survey
Calendario
International Monetary Fund. External Relations Dept.
La edición en Internet del Boletín del FMI, que se actualiza varias veces a la semana, contiene numerosos artículos sobre temas de actualidad en el ámbito de las políticas y la economía. Consulte las últimas investigaciones del FMI, lea entrevistas y escuche podcasts de los principales economistas del FMI sobre importantes temas relacionados con la economía mundial. www.imf.org/external/pubs/ft/survey/so/home.aspx
Keywords:
SV; IMF HIPC assistance; SDR interest rate; IMF-World Bank Spring Meetings; EU challenge