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Fund Support for Debt- and Debt-Service-Reduction Operations
Author:
International Monetary Fund. Legal Dept.
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International Monetary Fund. Strategy, Policy, &amp
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Review Department
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International Monetary Fund. Monetary and Capital Markets Department
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Series:
Policy Papers
Volume/Issue:
Volume 2021: Issue 018
Language:
English
Publication Date:
16 Mar 2021
DOI:
https://doi.org/10.5089/9781513574110.007
ISBN:
9781513574110
ISSN:
2663-3493
Pages:
41
Keywords:
PP; fund staff; DDSR Policy; Fund-financing of buyback; Fund-supported DDSROs; debtor country; Fund-financed DDSROs; cash payment; DDSRO operation; Debt relief; Debt restructuring; Debt reduction; Debt service; Currencies; Sub-Saharan Africa
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The note concludes that the Fund could support a member’s use of buybacks, cash sweeteners, or collateral in the context of a Fund-supported program, provided that (i) debt restructurings using buybacks, cash sweeteners or collateral offer significant efficiency gains relative to debt restructurings that do not rely on such instruments, but are underpinned by a regular Fund-supported program; and (ii) an adequate cushion of non-multilateral debt remains after the operation. The conditions under which buybacks, cash sweeteners or collateral can be expected to deliver significant efficiency gains are narrow and specified in some detail.
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Cover Policy Papers
Policy Papers
ISSN:
2663-3493
Publisher:
International Monetary Fund