IMF boosts support for low-income countries with new funding package

The International Monetary Fund (IMF) has taken a significant step to support low-income countries by completing a review of its Poverty Reduction and Growth Trust (PRGT) facilities.

The decision was announced today by Ms. Kristalina Georgieva, the Managing Director of the IMF.

Georgieva stated that the IMF’s members have approved a comprehensive reform and financing package designed to enhance the organization’s support for these countries. The new plan includes a framework that will use IMF net income and reserves to create approximately $8 billion in additional resources for the PRGT over the next five years.

This funding boost will increase the PRGT’s annual lending capacity to about $3.6 billion, which is more than double the amount available before the pandemic. The goal is to ensure that the IMF can continue to help low-income nations address their pressing financial needs during a time of unprecedented economic challenges.

With many low-income countries facing significant shocks and high demand for funding, this new agreement aims to provide the necessary resources to help these nations implement effective policies and strengthen their institutions.

The reforms also focus on tailoring support to the unique needs of each country, acknowledging that low-income nations have diverse economic situations. To ensure fairness, the IMF will maintain interest-free lending for the poorest countries while providing flexible terms for others. This approach aims to direct resources to those most in need and strengthen safeguards around lending.

Georgieva emphasized the global commitment among IMF members to assist low-income countries during these difficult economic times, reinforcing the organization’s mission to promote financial stability and growth worldwide.