Uma Ramakrishnan, deputy director of the Strategy, Policies and Audit Fund, announced at a press conference this Monday that the agency’s board of directors will approve and put in place the new fund on April 13. It starts on May 1st.
The purpose of the fund is vulnerable countries with low or middle income finance helps them increase their economic resilience and stabilize their payments in the long run.
This new tool will complement the existing one IMF loans and its main distinguishing feature is that it focuses on long-term structural challenges, unlike other programs that focus more on immediate liquidity issues.
“At first, funding will focus on mitigating the effects of climate change and improving pandemic preparednessAs both are public interest services and more targets may be added in the future,” said Ramakrishnan.
Access to this tool will be voluntary, and three-quarters of member states are likely to request it, according to the fund. This money will be provided by wealthy nations with interests abroad and beneficiaries will be those who need it most.
In this sense, access will depend on: reforms undertaken by potential buyers to strengthen their economy and indicated the viability of its debt from the IMF.
There will be loans with a maturity of twenty years and a grace period of ten and a half years. a “modest” interest rate and lower for the poorest countries