Press Release No. 23/60

IMF Executive Board Makes Temporary Modifications to the Annual and Cumulative Access Limits for Fund Lending

March 6, 2023

Washington, DC : The Executive Board of the International Monetary Fund (IMF) today agreed to temporarily increase the limits on members’ annual and cumulative access to Fund resources in the General Resources Account (GRA). These changes are intended to better support the Fund’s members in a particularly challenging and uncertain economic environment.

IMF lending is subject to both an annual and a cumulative limit on a member’s access to the Fund’s general resources. Access to resources beyond these limits is subject to the requirements of the Fund’s exceptional access framework. The access limits for the GRA were last set in 2016, with an annual limit of 145 percent of quota and a cumulative limit of 435 percent of quota [1] .

Today’s decision raises the annual limit in the GRA to 200 percent of quota and the cumulative limit to 600 percent of quota for a period of 12 months. These changes will provide member countries—particularly emerging markets and developing economies—that face increased financing pressures and vulnerabilities to access with higher Fund financial support without triggering the exceptional access framework. If circumstances warrant, staff would re-engage the Executive Board before the end of the 12-month period on a proposal to maintain for longer the higher GRA access limits.

The Executive Board also discussed possible changes in access limits under the Poverty Reduction and Growth Trust (PRGT), the Fund’s concessional financing arm. PRGT access limits were last raised by 45 percent in 2021, bringing them into alignment with GRA access limits for the first time. Demand for PRGT resources has increased sharply and is expected to grow further given successive shocks. The Fund will undertake a review of PRGT access limits once sufficient additional resources have been pledged to the PRGT, which currently faces a sizable subsidy resource gap. The IMF is working closely with members to fill this gap.

Executive Board Assessment [2]

Executive Directors welcomed the proposal to raise, on a temporary basis for 12 months, the annual and cumulative limits on overall access to Fund resources in the General Resources Account (GRA). Directors noted the challenging economic environment and uncertain prospects faced by emerging markets and developing economies and recognized that in this context Fund members are likely to have an increased need to access Fund resources to support their pressing financing needs and adjustment efforts.

Against this background, Directors supported a temporary increase in the annual access limit in the GRA from 145 percent of a member’s quota to 200 percent of quota and an increase in the cumulative access limit from 435 percent of quota to 600 percent of quota for the next 12 months. They agreed that an extension of the temporary increase could be appropriate, if circumstances warrant, which should be considered before the expiration of the 12-month period. Many Directors called for staff to engage early with the Executive Board on this issue. Directors noted that the impact of the proposed increases in the access limits on the Fund’s liquidity and on the demand for Fund resources even under extreme scenarios is expected to be limited, though subject to uncertainty.

Directors agreed with the proposed limited grandfathering following the expiration of the period of temporarily higher access limits. They noted and supported the automatic adjustment of thresholds for the combined access to GRA and PRGT resources under the policy on safeguards for high combined GRA and PRGT exposure with any changes to the overall GRA access limits, and also supported the proposed limited grandfathering in the application of this policy.

Directors emphasized the importance of the alignment of PRGT access limits with those of the GRA that was achieved in 2021. While access limits under the PRGT would be part of the expected comprehensive review of concessional facilities in 2024/25, Directors also agreed that, once substantial progress with PRGT fundraising toward the SDR 2.3 billion first stage target for subsidy resources agreed in 2021 has been made—with total pledges of SDR 2 billion or more—access limits under the PRGT would be reviewed at an ad hoc interim review. In this context, it was recognized that efforts to fill the resource gap should be expedited, and most Directors called on members in a strong economic position to accelerate their support for PRGT fundraising efforts. Many Directors also called for an early examination of the possible use of the Fund’s internal resources.

Directors underscored that access limits are key elements of the Fund’s risk management framework, providing an important safeguard to Fund resources, preserving their revolving nature, and supporting the catalytic role of Fund financing. They stressed the importance of diligent application of standard (non-exceptional access) policy criteria for determining access to Fund resources on a case-by-case basis. They also emphasized the importance of enhanced scrutiny and additional safeguards for exceptional access cases. Although the increased access limits heighten risks to the Fund, Directors considered that these risks are expected to be manageable. They agreed that an interim review of the adequacy of the precautionary balances could also serve as risk mitigation.

Directors agreed that a comprehensive review of access limits, tentatively planned for 2024, will assess the GRA access limits in the context of the outcome of the 16th General Review of Quotas.