The Acting Chair’s Summing Up— Post Program Monitoring During the Pandemic—Proposal for Temporary Streamlining of Procedures and Renaming of the Policy Executive Board Meeting 21/44, May 7, 2021

Executive Directors welcomed the opportunity to discuss the proposals for temporarily modifying the modalities for Post Program Monitoring (PPM)¹ in response to the challenges posed by the pandemic. They emphasized that the increase in Fund lending, including due to emergency assistance, and the corresponding higher risks to the Fund underscore the importance of maintaining appropriate safeguards to the Fund’s balance sheet, of which PPM policy is a central element. Directors broadly acknowledged, however, that in the current circumstances, it remains difficult to undertake frequent engagements with the authorities of member countries under PPM due to ongoing constraints in both the Fund and the countries concerned.

Directors generally agreed that temporarily streamlining the implementation modalities of the PPM framework is warranted to address the abovementioned constraints. They stressed, however, that the objective of PPM to safeguard Fund resources and members’ capacity to repay should be maintained. Thus, Directors reaffirmed that the existing PPM application criteria with respect to the absolute and quota-based thresholds, as well as the broad coverage under PPM of all financing instruments, remain appropriate.

Directors generally supported the proposal to temporarily suspend annual standalone PPM reports and to conduct PPM discussions at the time of the Article IV consultation, with the Article IV Consultation staff report also to include all the elements of the PPM discussion under the title of the Article IV report. A few Directors would prefer that these joint reports not be considered by the Board on a lapse of time basis. Given the temporary streamlined modalities, Directors emphasized the need to undertake timely Article IV consultations to preserve the objectives of the PPM policy, and for staff to maintain close communication with members under PPM during the period between Article IV consultations. They requested that the Board be informed in a timely manner should concerns with the capacity to repay of a country under PPM arise in between reports or should there be slippages in the timetable of Article IV consultations with these members. Directors also requested that the Board be updated in a timely manner on developments in countries where a successor program is under consideration. They agreed that the streamlined modalities will apply to all existing and future members subject to PPM until end-2022, after which the standard modalities would resume, including the stand-alone PPM report.

Going forward, and separate from the temporary change in PPM modalities, Directors agreed to rename the policy, from Post Program Monitoring to Post Financing Assessment (PFA), to reflect more appropriately that it not only covers outstanding credit resulting from Fund-supported programs but also credit from outright purchases in the GRA or PRGT disbursements.

SU/21/58

May 12, 2021

¹ Ed. Note: Decision No. 17037-(21/44), May 7, 2021, renamed “Post Program Monitoring” to Post Financing Assessment.