The IMF continues to work to build new trust support to help countries in need

Washington — The International Monetary Fund still builds support among members for proposed resilience and sustainability trusts that will allow richer countries to reach countries in need of their IMF reserves on Friday. I said yes, but I hope new means will come into play next year.

IMF officials have been competing to build support for the new trust proposed by IMF Chief Crystalinage Orgieva in June.

The IMF encourages wealthier members to donate or lend a $ 650 billion share of newly issued Special Drawing Rights (SDRs) to vulnerable countries, but some countries are new. It states that trust is beyond the scope of the IMF.

In a blog published Friday, IMF Strategy Director Seira Pazarbasioglu and her deputy Uma Rama Krishnan hope to advance resilience and sustainability trust at the IMF and World Bank’s annual meeting next week. Stated.

“Building a consensus is never easy. It takes time. You need a creative solution to make the difference,” they write. “With the support of the international community, we are confident that RST is one of the innovative solutions that could be operational in just over a year.”

They found that the proposed RST is cheaper and has a longer maturity than the IMF’s traditional lending terms, resulting in economic resilience and sustainability, especially in low-income, small and vulnerable middle-income countries. Said to help build.

They said members agreed with potential funding objectives, including climate, pandemic preparedness, and other “valued global public policy goals.”

They said they needed to provide liquidity to creditors who channeled SDRs when a balance of payments was needed, and to provide donors with adequate credit risk protection.

To that end, they said they are proposing a multi-layered credit risk protection framework with policy safeguards, financial buffers, and a diverse creditor and borrower base.

They said RST lending is likely to be in addition to regular IMF-backed programs and will benefit from the strong policy safeguards included in these programs.

They said details of trust size, eligibility requirements, conditions, lending terms, and financial architecture are still under consideration.

“We work closely with other international financial institutions, especially the World Bank, to ensure that RST is part of a broader strategy for supporting international countries, while being complete. We will continue to engage with members and other stakeholders to ensure support, “they said.

Andrea Charal