IMF Review of the Poverty Reduction and Growth Trust – Caribbean News Global
Washington, USA – The executive board of the International Monetary Fund (IMF) has completed the Review of Poverty Reduction and Growth Trust (PRGT) Facilities and Financing. This trust serves as the IMF’s vehicle for providing concessional financing to low-income member countries.
Kristalina Georgieva, managing director of the IMF, stated that “our membership today has adopted a comprehensive reform and financing package for the Poverty Reduction and Growth Trust to bolster the IMF’s support to low-income countries.”
The reform package includes a framework for deploying IMF net income and/or reserves aimed at generating approximately US$8 billion in additional subsidy resources for the PRGT over the next five years. When combined with other reform measures and successful bilateral fundraising from the previous year, this initiative aims to elevate the PRGT’s long-term annual lending capacity to around US$3.6 billion. This figure more than doubles the pre-pandemic level, thereby catalyzing substantial additional flows from both public and private sectors.
This agreement is particularly timely as low-income countries are grappling with a series of unprecedented shocks and significant financing needs. Given the exceptionally high demand for PRGT financing, the recently approved package will provide the concessional resources necessary for the Fund to continue its commitment to assist low-income countries in implementing sound economic policies and strengthening their institutions.
The reforms are tailored to address the diverse economic circumstances of low-income countries. To ensure that limited concessional resources are allocated to those most in need, a new interest rate mechanism will maintain interest-free lending for the poorest nations while ensuring that lending terms for other countries maintain a sufficient level of concessionality. Additionally, access policies will provide flexibility in adjusting Fund support, and safeguards will be both strengthened and streamlined.
Our global membership has once again demonstrated a shared commitment to support low-income members during challenging economic times.
