International Monetary Fund Revises loans for low-income nations

International Monetary Fund has adopted reforms for a loan programme designed to help low-income countries cope with emergencies caused by events beyond their control.According to a statement issued today by the body, programme aims to provide assistance more quickly, and in larger amounts, to help low-income IMF members, many of them in sub-Saharan Africa, cope with events such as commodity price changes, natural disasters and conflicts and crises in neighboring countries, which disrupt trade.

Statement shows that revamp, approved by executive board on 19 September, also streamlined conditionality, commitments that borrower governments make on their economic and financial policies, attached to Exogenous Shocks Facility. Review of ESF will make it easier and faster for members to receive fund's support has reportedly been accelerated in light of experience and recent worsening of global economic conditions, in particular with recent episode of surging food and fuel prices that have hit low-income countries particularly hard, an IMF spokesman said.
This component could be used on a stand-alone basis or as a first step towards high access component, along lines of current ESF, with access up to 75 percent of quota for each arrangement in normal circumstances. Resources would be provided in multiple disbursements based on reviews. This component could be used following a rapid-access component, or on a stand-alone basis," statement says.
Under rapid access component, member would need only to commit to appropriate policies to address shock, and in exceptional cases, to take targeted up-front measures. It further indicates that programme will be able to be used more flexibly in conjunction with other fund facilities and instruments, for example, with a Policy Support Instrument