The Post Financing Assessment (PFA)

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Purpose

Maintain closer engagement with members that have substantial outstanding Fund credit but do not have a Fund-supported program or a staff-monitored program. By assessing these members’ capacity to repay the Fund, PFA is intended to provide an early warning of circumstances and policies that could ultimately jeopardize Fund resources. It thus helps identify risks early and facilitates the provision of advice on policies that will assist these members in addressing the risks and repaying the Fund.

Criteria

The IMF’s Managing Director recommends a PFA to the Executive Board when the outstanding credit of a country to the IMF exceeds any of these thresholds:

• 200 percent of quota from the Fund’s General Resources Account (GRA), or from the
  Fund as Trustee of the Poverty Reduction and Growth Trust (PRGT), or from the
  Fund as Trustee of the Resilience and Sustainability Trust (RST), or a combination thereof.
• SDR 1.5 billion for credit from the GRA,
• SDR 0.38 billion from the PRGT,
• SDR 0.38 billion from the RST,

and it no longer has an IMF-supported program or a staff-monitored program.

In some cases, a PFA might not be needed even if the country meets the criteria above. This can apply when a successor financing arrangement, PCI or an SMP is expected to be approved within six months, or when the policies and external position of the member country are determined to be sufficiently strong that a PFA would be unwarranted.

In other cases, a PFA may be required even if the country’s outstanding credit is below the above-specified thresholds. This occurs if economic developments call into question the country’s progress toward external viability.

Timing

The IMF Executive Board decides on a PFA at the time of the final  program review if the country’s outstanding credit is expected to exceed any of the specified thresholds and no follow-up program engagement is envisaged. However, the Board can decide on a PFA for a country on a standalone basis.

Duration

In effect until the country’s outstanding credit to the IMF falls below the applicable thresholds, a new arrangement, a PCI or an SMP is approved, or the Board accepts a proposal from IMF management for early termination.

The IMF’s Executive Board can agree to discontinue a PFA―even before outstanding credit falls below the thresholds―if strong policies are in place and the external position is sound.

Process

Countries undertake more frequent formal consultations with the IMF than is the case under the IMF’s policy advice cycle, with a particular focus on macroeconomic and structural policies, and risks that have implications for the country’s external viability and capacity to repay the IMF. There is normally one standalone PFA staff report issued to the Executive Board in a 12-month period.