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IMF ADOPTS NEW LIMITS ON FINANCING MEMBER COUNTRIES

 IMF ADOPTS NEW LIMITS ON FINANCING MEMBER COUNTRIES
 WASHINGTON, Nov. 9 /PRNewswire/ -- The International Monetary


Fund has adopted new limits on the amount of financing available to member countries that are to apply once the 50 percent increase in IMF quotas(A) under the Ninth General Review of Quotas enters into effect. In addition, the policy on lending limits, and the financial terms for lending under the IMF's various lending policies, have been simplified. The IMF has also eliminated a technical provision of its lending operations to ensure a more appropriate application of conditionality, without affecting access to the IMF's resources.
 The quota increase under the Ninth General Review will enable the IMF to finance its lending operations without borrowing. Accordingly, the IMF has terminated the Enlarged Access Policy, in effect since 1981, under which it has supplemented its quota resources with borrowed funds.
 The new limits, expressed in terms of the new quotas, are intended broadly to maintain potential access to IMF financing for the membership as a whole. These limits will ensure that the IMF can continue to meet its central role in supporting and catalyzing other support for members' economic adjustment efforts, while maintaining a sound liquidity position in the period ahead.
 Under the new lending limits for IMF financing, the annual access limit under stand-by and extended arrangements in support of members' economic programs will be 68 percent of quota; the cumulative limit will be 300 percent of quota net of repayments falling due to the IMF during the arrangement period (see the following table); and the limit on the augmentation of arrangements with the IMF to support debt and debt-service reduction operations is 30 percent of quota. The limits are not targets, and access to IMF financing within the limits will continue to vary in each case, according to the circumstances of the member. In exceptional circumstances, the IMF may still approve stand-by or extended arrangements for amounts in excess of these limits. The new access limits are intended to be temporary in nature, and, therefore, will be reviewed annually by the executive board in light of all relevant factors, including the magnitude of members' balance of payments problems and the IMF's own liquidity situation.
 Limits for the IMF's special lending policies, in terms of the new quotas, have also been revised in approximately the same proportion to the adjustment in the lending limits for stand-by and extended arrangements. Maximum access under the compensatory and contingency financing facility (CCFF) will be 95 percent of quota, and access under the buffer stock financing facility (BSFF) will be 35 percent of quota.
 Access limits for the IMF's concessional lending policies are also cast in relation to new quotas. For the three-year structural adjustment facility (SAF), access will be 50 percent of quota (with limits of 15, 20 and 15 percent of quota a year, respectively). Under the three-year enhanced structural adjustment facility (ESAF), the maximum access limit will be 190 percent, and the exceptional limit is 255 percent.
 Access Limits Under IMF Arrangements, Special Facilities and in Connection with Augmentation for Debt and Debt-Service Reduction
 (In percent of quota)
 Under Old Under New
 Quotas Quotas
 Access under credit tranches and
 the Extended Fund Facility
 Annual 90-110 68
 Cumulative 400-440 300
 SAF(B) 70 50
 1st year 20 15
 2nd year 30 20
 3rd year 20 15
 ESAF(C)
 Maximum 250 190
 Exceptional 350 255
 CCFF 122 95
 Sublimits:
 Compensatory(C) 40 30
 Contingency 40 30
 Cereal(C) 17 15
 Optional tranche 25 20
 BSFF 45 35
 Augmentation for debt/
 debt-service reduction 40 30
 (A) A member's quota in the IMF determines, in particular, its subscription, its voting weight, its access to IMF financing and its allocation of SDRs.
 (B) Access over a three-year period.
 (C) If the balance of payments position, apart from the effects of the export shortfall (cereal import costs), is satisfactory, the current limit is 83 percent of quota, and the new limit is 65 percent of quota.
 -0- 11/9/92
 /CONTACT: International Monetary Fund, External Relations Department, 202-623-7100/ CO: International Monetary Fund ST: District of Columbia IN: FIN SU:


KD -- DC021X -- 8848 11/09/92 15:42 EST
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Date:Nov 9, 1992
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