The modifications facilitate the granting of emergency loans
The International Monetary Fund (IMF) reported this Saturday that its executive board has approved changes in its financing guarantee policy that apply in situations of exceptionally high uncertainty.
The modifications facilitate the granting of emergency loans and are contemplated against “external shocks that are outside the control of the authorities of the countries and the scope of its economic policies,” he said in a statement.
The IMF seeks to correct key obstacles when designing an Upper Credit Tranche (UCT) agreement in cases of high uncertainty. This credit normally requires, before its validation, the implementation of a program to resolve the balance of payments problems and restore external viability in the medium term.
The change allows official bilateral creditors offer upfront a credible guarantee of debt relief and/or financing and expands the use of guarantees of repayment capacity from creditors or donors of emergency loans, which would help establish adequate safeguards.
At the time of delivering those credits, The IMF outlines a scenario with downside risks and another upward to make sure your plan can work in both cases.
The executive board admits that the Proposed Changes Involve Considerable Risks for the institution, but the statement made it clear that the option to support countries experiencing high uncertainty outweighs the additional dangers resulting from the modification
The change in your policy could favor Ukraine in practicea country on which Russia launched an invasion in February of last year.
The announcement coincides at a time when the IMF representative for Ukraine, Vahram Stepanyan, said this week that the talks with Ukrainian authorities for an agreement on a financing program are progressing at a good pace
According to the criteria of
Know more