Lending

From the outset of the COVID-19 pandemic, the IMF has responded with unprecedented speed and magnitude, making use of its current lending capacity of about $1 trillion.¹

This response has entailed provision of financial assistance to countries with urgent or potential balance of payments needs, with the aim of helping protect the lives and livelihoods of people, especially the most vulnerable. The Executive Board also temporarily streamlined internal processes early in the crisis to allow the IMF to respond more quickly to members’ requests for emergency assistance—and in many cases made emergency financing available within weeks of receiving a request.² In addition, the Executive Board temporarily suspended the application of existing high-access procedures for Rapid Credit Facility requests.³

Policy safeguards were introduced in August 2020 to help mitigate financial risks from a member having combined high access to both PRGT and General Resources Account (GRA) lending facilities. Safeguards now apply to any IMF member with combined access to GRA and PRGT resources that exceeds quota-based thresholds set at the same level that triggers the exceptional access framework of the GRA.

In addition, to accommodate high demand for IMF lending resulting from the crisis, the Executive Board temporarily increased (1) the annual access limit for the IMF’s GRA that triggers application of the exceptional access framework and (2) both the annual and cumulative access limits on concessional lending through the PRGT (see GRA and PRGT agreement details on Access Limits in the interactive lending map above).

Demand for IMF emergency financing tapered off beginning in the third quarter of 2020, and some borrowers have moved toward multiyear upper-credit-tranche-quality arrangements. In addition, the IMF provided grants for debt service relief to its poorest and most vulnerable members affected by the COVID-19 pandemic.

Between May 1, 2020, and April 30, 2021, the IMF’s financial assistance focused on the following areas:

1. Emergency financing under the RFI and RCF

   The IMF received a record number of requests for emergency financing—from 39 countries (about $17 billion, of which $6 billion was disbursed to 26 low-income countries). The Executive Board temporarily doubled the access limits to the emergency financing facilities: the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI) (see RCF and RFI agreement details on Access Limits in the interactive lending map above).

2. Building on existing lending arrangements

   The IMF also augmented existing arrangements to accommodate urgent new needs arising from the pandemic within the context of the ongoing policy dialogue. Between May 1, 2020, and April 30, 2021, the Executive Board approved augmentation of arrangements with nine members.

3. New lending arrangements, including precautionary arrangements:

   Between May 1, 2020 and April 30, 2021, the Executive Board approved eight new nonprecautionary IMF-supported arrangements with seven countries. In addition, four precautionary arrangements—three Flexible Credit Lines and one Precautionary and Liquidity Line—were made available to members.

4. Debt service relief

   The Catastrophe Containment and Relief Trust (CCRT) allows the IMF to provide grants for debt relief to the poorest and most vulnerable member countries hit by catastrophic natural or public health disasters. It was enhanced in March 2020 and was subsequently used to provide debt service relief on a grant basis to the IMF's poorest members affected by the COVID-19 pandemic. In total, 29 eligible countries have received debt service relief of close to SDR 520 million in three tranches, which were approved by the Executive Board on April 13, 2020; October 2, 2020; and April 1, 2021 (see CCRT agreement details in this table).

5. Debt relief under the HIPC Initiative

   On March 25, 2020, following Somalia’s clearance of its arrears to the IMF, the Executive Board determined that Somalia was qualified for debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and that Somalia had reached its HIPC decision point. By the end of April 2021, the Executive Board had approved two interim assistance payments to Somalia in the total amount of SDR 1.791 million to cover its financial obligations falling due during the periods March 25, 2020–March 24, 2021, and March 25, 2021– March 24, 2022. On March 26, 2021, the Executive Board agreed that Sudan⁴ was eligible for debt relief assistance under the enhanced HIPC Initiative based on the preliminary assessment.was eligible for debt relief assistance under the enhanced HIPC Initiative based on the preliminary assessment.

1. Including prepandemic commitments, as of April 30, 2021, total undisbursed lending commitments and credit outstanding under the IMF’s General Resources Account were about SDR 184 billion; the corresponding total under the PRGT, which provides concessional lending to low-income countries, was about SDR 14.8 billion.
2. These emergency pandemic procedures lapsed in October 2020.
3. High-access procedures require an informal Executive Board session based on a short staff note that includes discussion of program strength, capacity to repay, and debt vulnerabilities. The high-access procedures are triggered when (1) a request for IMF financing brings total access to more than 180 percent of a country’s quota over a 36-month period or (2) total outstanding credit from the PRGT exceeds or is projected to exceed 225 percent of a country’s quota. In March 2021, these high-access thresholds were temporarily increased to 240 percent of quota for the “flow trigger” through the end of 2023 and 300 percent for the “stock trigger” for the period through the end of June 2021.
4. The Executive Boards of the IMF and World Bank approved Sudan’s eligibility for debt relief under the enhanced Heavily Indebted Poor Countries Initiative on June 29, 2021 (after this report was finalized). For more information, visit www.imf.org/sudan.