The Chair’s Summing Up— Enhancing the Emergency Financing Toolkit— Responding to the COVID-19 Pandemic, Executive Board Meeting 20/36, April 6, 2020

Executive Directors welcomed the timely discussion on enhancing the Fund’s emergency financing toolkit, emphasizing the importance of a rapid and decisive Fund response to COVID-19 to help members meet their urgent financing needs. To that end, Directors agreed on a temporary increase in access limits under the regular window of the Rapid Financing Instrument (RFI) and the exogenous shocks window of the Rapid Credit Facility (RCF), with annual access limits rising from 50 to 100 percent of quota and cumulative limits rising from 100 to 150 percent of quota, net of scheduled repayments or repurchases, respectively.

Directors agreed that the new access limits would apply for a temporary six-month period, with a review of the limits as proposed. To facilitate urgent financing requests, most Directors supported the proposal to temporarily suspend the procedures for high access RCF requests under the PRGT. Directors emphasized that this emergency financing provided by the Fund should be truly additional, both for access to the PRGT and GRA. In this regard, many Directors looked forward to exploring ways in which a temporary relaxation in normal access limits could accommodate the surge in emergency lending. Directors also highlighted the important catalytic role of Fund emergency financing in spurring additional resources from other partners.

Directors stressed the importance of carefully monitoring implementation, including by putting in place appropriate safeguards of accountability, transparency, and control to ensure the appropriate use of emergency financing, where governance and corruption vulnerabilities are macro-critical. Careful consideration will also need to be given to debt sustainability issues.

Directors concurred that the impact of higher RFI access limits on the General Resources Account would be manageable, subject to heightened Covid-19 uncertainties. However, they recognized that the higher access limits under the RCF would exacerbate growing pressures on PRGT loan resources, and stressed the need for expedited and ambitious fundraising efforts.

Provided that sufficient resources were raised quickly, Directors looked forward to considering an increase in the overall PRGT annual normal access limit. This would provide additional space for PRGT financing later in the year, including blended with potential arrangements in the GRA. In this regard, Directors asked for close assessments of the self-sustainability of the PRGT. They looked forward to considering additional suggestions to strengthen the Fund’s efforts in the upcoming review of the Fund’s concessional financing.

SU/20/47,

April 9, 2020