Ceyla Pazarbasioglu

Yesterday the International Monetary Fund News Executive Board completed the review of the Poverty Reduction and Growth Trust. The package includes a framework to deploy IMF net income and/or reserves to generate about US$8 billion in additional subsidy resources for the PRGT over the next five years.

I'm pleased to announce that the Executive Board has reached consensus on a reform of IMF charges and surcharges. This will lower borrowing costs for our members by 36 percent, while preserving the IMF's financial capacity to support countries in a challenging global environment.

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Thrilled to share that the Executive Board recently endorsed reforms to promote the IMF's capacity to support countries undertaking debt restructurings.
The reforms are designed to ensure a more agile approach to IMF support to countries undertaking debt restructuring while maintaining adequate safeguards for IMF financing and reinforcing the existing architecture for debt resolution.
As context, a number of recent IMF-supported programs involving debt restructurings experienced significant delays from the time Staff Level Agreement was reached until the time the necessary official creditor assurances were provided to allow the approval of IMF financing.
That said, there has been a marked improvement lately and cases are moving forward more quickly, with substantial progress in collaboration among official bilateral creditors.
For example, while it took Chad 11 months to move from a Staff-Level Agreement with the IMF staff to secure the creditor assurances needed for approval of IMF financing; it took Zambia 9 months , Sri Lanka 6 months, and Ghana 5 months. But more progress is needed.
To that end, the reforms are designed to support the existing architecture for debt resolution, preserving and complementing what works well while addressing time gaps that can be created by IMF requirements and enhancing information flows.
The reforms recognize different official creditor processes and provide a robust framework to support their participation in restructurings on terms consistent with restoring debt sustainability.
They are also consistent with different sequencing of official and private restructurings (although this choice remains with the debtor and creditors).

The IMF has approved a 36-month financial arrangement for Somalia worth about $100m. This program will build on progress made by 🇸🇴, including its reaching the Completion Point of the Heavily Indebted Poor Country’s Initiative.

“Today, we need to further enhance our collaboration, in particular with regard to climate change, renewed high debt vulnerabilities, and digital transition.”