IMF to launch new form of aid
IMF to launch new form of aid

IMF to launch new form of aid

The new IMF seal of approval would make it easier for governments to access other forms of financing.
AFP
The International Monetary Fund announced on Wednesday that it would launch a new tool to support governments in financial trouble - but one that involves no money - formalising a step it took last week for Greece.

Instead of providing cheap loans to member countries, the new IMF tool will serve as a good housekeeping seal of approval for a government's reform programme.

With that approval in hand governments would be more likely to be able to access other forms of financing from banks and bond markets, the IMF said in a statement.

“The new instrument is designed to help countries unlock financing from official and private donors and creditors,” the IMF said.

“It enables them to signal commitment to reforms and catalyse financing from other sources.”

The IMF last week revived a rarely used mechanism under which it approved a one-year loan to Greece but withheld the disbursement of funds until the country receives significant debt relief from its eurozone partners. That had a similar effect as the new tool: allowing Greece to return to markets this week to issue three billion euros (US$3.5 billion) worth of five-year bonds, and removing a major roadblock in the negotiations with the euro area. The IMF board this month approved the new non-financing Policy Coordination Instrument (PCI), which unlike traditional fund programs will not have any eligibility criteria, as long as the country is not delinquent in payments to the IMF. Rather than providing loans in exchange for strict adherence to an agreed programme of economic and financial reforms - with performance targets reviewed quarterly - the IMF will focus only on the government's policy package.

But the IMF stressed that “policies supported under the instrument would be required to meet the same standard as those required under a standard IMF loan.”

Fund staff would provide periodic reviews under the PCI, every six months or so, but the schedule would be flexible, as would the duration of the programme.

The IMF has always provided policy advice to member countries on a variety of topics including design of reforms for tax, pension or labour policies.

It also offers a programme called a Flexible Credit Line which is similar to the PCI in that it provides an IMF stamp of approval on a country's economic policies, but also makes available a line of credit that would only be tapped if the country faces dire circumstances beyond its control, like a severe drop in commodity prices or a global financial crisis.

Some economists have expressed concern, however, about the potential stigma associated with a country that goes to the IMF for financial assistance.

NAMPA/AFP

Comments

Namibian Sun 2024-03-29

No comments have been left on this article

Please login to leave a comment

Katima Mulilo: 19° | 36° Rundu: 19° | 29° Eenhana: 19° | 29° Oshakati: 21° | 30° Ruacana: 20° | 33° Tsumeb: 19° | 29° Otjiwarongo: 16° | 29° Omaruru: 19° | 32° Windhoek: 17° | 29° Gobabis: 17° | 30° Henties Bay: 16° | 20° Wind speed: 22km/h, Wind direction: S, Low tide: 11:22, High tide: 05:24, Low Tide: 23:26, High tide: 17:46 Swakopmund: 16° | 17° Wind speed: 24km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:22, Low Tide: 23:24, High tide: 17:44 Walvis Bay: 16° | 22° Wind speed: 27km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:21, Low Tide: 23:24, High tide: 17:43 Rehoboth: 19° | 30° Mariental: 23° | 34° Keetmanshoop: 24° | 35° Aranos: 22° | 33° Lüderitz: 15° | 28° Ariamsvlei: 24° | 35° Oranjemund: 14° | 25° Luanda: 27° | 28° Gaborone: 20° | 32° Lubumbashi: 17° | 26° Mbabane: 16° | 21° Maseru: 11° | 29° Antananarivo: 16° | 27° Lilongwe: 17° | 27° Maputo: 20° | 28° Windhoek: 17° | 29° Cape Town: 17° | 28° Durban: 20° | 24° Johannesburg: 16° | 24° Dar es Salaam: 26° | 32° Lusaka: 20° | 30° Harare: 16° | 29° Currency: GBP to NAD 23.77 | EUR to NAD 20.36 | CNY to NAD 2.61 | USD to NAD 18.89 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.77 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.14 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.35 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 18.89 | USD to ZMW 25.01 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 74536 Up +0.85% | Namibian Stock Exchange (NSX) Overall Index 1528.69 Up +0.84% | Casablanca Stock Exchange (CSE) MASI 12986.94 Up +0.04% | Egyptian Exchange (EGX) 30 Index 27559.35 Down -2.36% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 233.12/OZ UP +1.93% | Copper US$ 3.99/lb UP +0.12% | Zinc US$ 2 455.50/T UP 0% | Brent Crude Oil US$ 87.65/BBP UP +1.46% | Platinum US$ 908.62/OZ UP +1.53% Sport results: Weather: Katima Mulilo: 19° | 36° Rundu: 19° | 29° Eenhana: 19° | 29° Oshakati: 21° | 30° Ruacana: 20° | 33° Tsumeb: 19° | 29° Otjiwarongo: 16° | 29° Omaruru: 19° | 32° Windhoek: 17° | 29° Gobabis: 17° | 30° Henties Bay: 16° | 20° Wind speed: 22km/h, Wind direction: S, Low tide: 11:22, High tide: 05:24, Low Tide: 23:26, High tide: 17:46 Swakopmund: 16° | 17° Wind speed: 24km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:22, Low Tide: 23:24, High tide: 17:44 Walvis Bay: 16° | 22° Wind speed: 27km/h, Wind direction: SW, Low tide: 11:20, High tide: 05:21, Low Tide: 23:24, High tide: 17:43 Rehoboth: 19° | 30° Mariental: 23° | 34° Keetmanshoop: 24° | 35° Aranos: 22° | 33° Lüderitz: 15° | 28° Ariamsvlei: 24° | 35° Oranjemund: 14° | 25° Luanda: 27° | 28° Gaborone: 20° | 32° Lubumbashi: 17° | 26° Mbabane: 16° | 21° Maseru: 11° | 29° Antananarivo: 16° | 27° Lilongwe: 17° | 27° Maputo: 20° | 28° Windhoek: 17° | 29° Cape Town: 17° | 28° Durban: 20° | 24° Johannesburg: 16° | 24° Dar es Salaam: 26° | 32° Lusaka: 20° | 30° Harare: 16° | 29° Economic Indicators: Currency: GBP to NAD 23.77 | EUR to NAD 20.36 | CNY to NAD 2.61 | USD to NAD 18.89 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.77 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.14 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.35 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 18.89 | USD to ZMW 25.01 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 74536 Up +0.85% | Namibian Stock Exchange (NSX) Overall Index 1528.69 Up +0.84% | Casablanca Stock Exchange (CSE) MASI 12986.94 Up +0.04% | Egyptian Exchange (EGX) 30 Index 27559.35 Down -2.36% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 233.12/OZ UP +1.93% | Copper US$ 3.99/lb UP +0.12% | Zinc US$ 2 455.50/T UP 0% | Brent Crude Oil US$ 87.65/BBP UP +1.46% | Platinum US$ 908.62/OZ UP +1.53%