The Executive Board of the International Monetary Fund (IMF) has approved reducing the IMF’s borrowing costs for members by 36% or about $1.2 billion annually.
The IMF Press Centre statement said the development resulted from the fund’s Board Review of Changes and the Surcharge Policy on Friday, October 11, 2024.
Following the meeting’s outcome, IMF Managing Director Kristalina Georgieva disclosed that due to the challenging global environment and high interest rates, the fund’s members have reached a consensus on a comprehensive package.
She said:
According to the statement, Georgieva disclosed that the approved package would take effect on November 1, 2024.
Per the statement, charges and surcharges remain essential to the IMF’s cooperative lending and risk management framework.
She said charges and surcharges cover lending intermediation expenses, help accumulate reserves to protect against financial risks, and provide incentives for effective borrowing.
The move provides a solid financial foundation, allowing the fund to extend crucial balance of payments support on affordable terms to member countries when needed.
Georgieva said the reforms would ensure that the fund continues to serve members in a changing world.
The statement said charges and surcharges did not apply to borrowing from the IMF’s Poverty Reduction and Growth Trust, under which low-income members receive financial support on concessional terms.
TimesNow.com.ng earlier reported that African countries, including Nigeria, struggle with massive International Monetary Fund (IMF) debt burdens, showing a high total IMF credit outstanding.
The IMF extends credit to countries facing economic challenges while promoting global monetary cooperation.
The support causes economic reforms and policy changes such as fiscal restraint and improved governance.
Source: TimesNow.com.ng
