The Chair’s Summing Up— Maintaining Access to Bilateral Borrowing and Review of the Borrowing Guidelines, Executive Board Meeting 20/32, March 30, 2020

Executive Directors reiterated their commitment to a strong, ­quota-based and adequately resourced IMF to preserve its role at the center of the global financial safety net. In light of the economic and financial impact of the COVID-19 pandemic, it is critical to maintain the Fund’s resource envelope to support members’ needs and boost global confidence. In this context, Directors supported another round of temporary bilateral borrowing beyond 2020, as part of the membership’s agreed package on IMF resources and governance reforms. They underscored that, as the third line of defense after quotas and the New Arrangements to Borrow (NAB), successive rounds of bilateral borrowing agreements (BBAs) have played a critical role in ensuring that the Fund’s overall resource envelope is adequate to meet the membership’s potential needs. Directors also supported the proposed approach for determining the credit amounts of individual agreements, which would maintain the Fund’s overall resource envelope and build on a broad consensus among creditors. Directors looked forward to a timely completion of the 16th General Review of Quotas.

Directors agreed that the framework for the 2020 BBAs should closely follow that for the 2016 BBAs. They supported a common 3-year term of the agreements from January 1, 2021 through December 31, 2023, which could be extended if needed by one year through end-2024 by a decision of the Executive Board and consent of the respective creditors. While issuing a strong call for timely implementation of NAB Reform, Directors supported including a safeguard in case the effectiveness of the NAB Reform is delayed beyond January 1, 2021.

Directors endorsed the key substantive provisions of the proposed 2020 BBAs and the template for 2020 loan and note purchase agreements, including transitional arrangements related to the interactions between the 2016 BBAs, 2020 BBAs, and NAB. They reiterated that the key substantive provisions should be the same across all 2020 BBAs, although drafting variations not affecting the substance of these key provisions could be accommodated.

Directors agreed that the Guidelines for Borrowing remain broadly appropriate and endorsed the proposed limited updates to reflect the expiration of the 2012 BBAs and the envisaged round of 2020 BBAs. Directors welcomed the broad indications of willingness to participate in the 2020 BBAs, subject to domestic procedures. Directors called for finalizing the 2020 BBAs as early as possible, helping to ensure that the Fund can continue to address members’ financing needs.

Directors agreed that the Guidelines for Borrowing remain broadly appropriate and endorsed the proposed limited updates to reflect the expiration of the 2012 BBAs and the envisaged round of 2020 BBAs. Directors welcomed the broad indications of willingness to participate in the 2020 BBAs, subject to domestic procedures. Directors called for finalizing the 2020 BBAs as early as possible, helping to ensure that the Fund can continue to address members’ financing needs.

SU/20/45

April 6, 2020