With $50 Billion Loan Goal, IMF Will Decide on New Resilience Trust

With a $50 billion loan goal, the IMF will decide on a Resilience Trust

This Wednesday, the International Monetary Fund will evaluate a new final proposed lending trust, with the climate change and sustainability-focused project giving a total of $50 billion to vulnerable countries.

IMF economist Vimal Thakoor said in an online event on Monday that the board will examine the Resilience and Sustainability Trust, or RST, and that staff are hopeful that permission will be given. Officials from the fund stated in January that they intended to receive permission before the institution’s spring meetings, which begin next week.

The trust would allow the IMF to lend to nations in order to help them implement long-term structural changes, with an emphasis on climate change and pandemic preparation at first. Richer countries would pay the RST by directing their IMF funds — known as special drawing rights, or SDRs — to poorer countries, he added, with the first cases being examined by the end of the year.

Your Friends Also Read:  Africa's Corruption Fight: What Must Be Done For Nigeria To Rank Higher?

“The proposal that was presented to the board is currently being considered for approval,” Thakoor explained. “Of course, we can’t predict the vote’s outcome, but we’re optimistic based on our talks.”

The idea aims to fix a fundamental flaw in the IMF’s establishment of a record $650 billion in assets to deal with the aftermath of the epidemic last year. Although interested wealthier countries may already aid the poorest countries by pooling reserves, the new trust is needed to expand the pool of beneficiaries.

According to Thakoor, the RST would likely start with $30 billion in resources and grow to $50 billion in the long term.

Your Friends Also Read:  Elephant Poaching Drops By 70% In Mozambique

The amount of money that each country might borrow from the trust would be limited to 150 percent of its IMF quota – its part of the institution’s resources — or $1.4 billion, whichever is less. This constraint basically caps the amount of money that a major middle-income country like Turkey, Russia, or Argentina may get.

Nations would also have to be already enrolled in an IMF financial or non-financial program, making the trust a complement rather than a replacement. Because the trust’s goal is to address longer-term threats to a country’s balance of payments, governments would have 20 years to repay loans – far longer than previous IMF funding — with payback beginning after 10 years..

Your Friends Also Read:  Accused of corruption, Nigeria's Chief Justice fails to appear in court

According to Thakoor, around three-quarters of IMF member countries will be eligible, including low-income and emerging countries, middle-income territories with gross national per-capita income less than roughly $12 000 per year, and tiny states with per capita income less than $30,000.


All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from News Central TV.

Contact: digital@newscentral.ng

Total
0
Shares

Leave a Reply

Previous Article
Security Operatives Deployed to Nigerian Community After Attack (News Central TV)

Security Operatives Deployed to Nigerian Community After Attack

Next Article

Attacks on Foreigners in S.A, 'Deeply Worrisome, Unfortunate' - U.N.

Related Posts
Powered by Live Score & Live Score App