By BUUMBA CHIMBULU
THE International Monetary Fund (IMF) has approved the extension of increased access limits under the Rapid Financing Instrument (RFI), available to all member countries including Zambia.
Member countries can access the facility to urgently address their balance of payment needs arising from persistent related economic disruptions.
This is according to a statement issued by the IMF communication department in Washington DC.
In addition, the Executive Board has approved the extension of increased access limits for Rapid Credit Facility (RCF), available only to low income countries eligible for concessional financing.
IMF stated that the Executive Board had approved a six-month extension of the temporary increase in access limits under the emergency financing instrument through to April 6, 2021, following the persistent impact of COVID-19 pandemic.
“Against the background of urgent balance of payments needs resulting from the corona virus pandemic, in April 2020 the IMF approved a temporary increase in access limits under its emergency financing instruments, the RFI, available to all members, and the RCF, available only to low-income countries eligible for concessional financing,” it indicated.
It explained that the limits on annual access were raised from 50 to 100 per cent of quota, and the limits on cumulative access were increased from 100 to 150 percent of quota, for the six-month period through October 5, 2020.
IMF indicated that as of August 31, this year, 69 members had received financial support through the emergency financing instruments since the onset of the pandemic, three-quarters of whom received support at the higher levels made possible by the increase in the access limits.
It stated that through the executive board assessment, the executive directors welcomed the review of enhanced access limits under the Fund’s emergency financing instruments.
They supported the proposal for a six month extension of higher access limits under the regular window of the RFI and the exogenous shocks window of the RCF, with annual and cumulative access limits remaining at 100 per cent of quota and 150 per cent of quota, respectively, through April 6, 2021.
There was broad agreement that the extension was justified to provide the Fund with flexibility to support urgent balance of payments needs, in the context of persistent pandemic related economic disruptions. Directors also supported the proposal to extend the temporary suspension of the procedures for high access RCF requests through April 6, 2021.
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