Bilateral Agreements Imf
Funds for IMF lending to its members on non-concessional terms are provided by member countries primarily through the payment of quotas. Multilateral and bilateral borrowing serves as the second and third lines of defence, respectively, providing a temporary complement to quota resources. These loaned resources played a crucial role in the IMF`s edable to support its members during the global economic crisis. The IMF`s current total envelope of about DDS 978 billion resulted in a lending capacity or “firepower” of about P715 billion (about $1 trillion), following the provision of a liquidity buffer and the inclusion of the fact that only the resources of members with a strong external position are used for credit. The IMF said that both the new bilateral framework and the expansion of the NAB would enter into force on January 1, 2021. Bilateral resources are a third line of defence, after a considerable depletion of quota and NAB resources. In this context, at the end of August 2016, the Executive Board agreed to maintain access to new bilateral credit under a new framework (the 2016 Growth Agreements) which is closely based on the terms of the 2012 credit line and provides that creditors represent 85% of the total amount of the loan promised under the new agreements, for activation. Washington, DC – The IMF Executive Board yesterday approved a new round of IMF bilateral borrowing starting January 1, 2021, to surpass the bilateral lending arrangements (BAAs) currently in place by the end of December 2020. Overall, the framework is in line with the one agreed in 2016 for current BBAs. Initially, the new BBAs have a duration of three years until the end of 2023, which can be extended by an additional year until the end of 2024.
These new arrangements will help maintain the IMF`s borrowing capacity of $1 trillion over the next few years and ensure that it is able to meet the needs of members. The extended maturities preserve the IMF`s total credit capacity of about $1 trillion for another year and is a wise step in giving members and markets confidence that the Fund still has sufficient resources to meet members` potential needs. This measure is part of a broader package of measures on IMF resources and governance reforms – including support for maintaining the IMF`s current resource framework and consideration of a doubling of new lending arrangements (NSAs) and a new temporary cycle of bilateral borrowing after 2020 – approved by IMF members at the 2019 annual meeting. . .