scholarly journals Poverty Reduction and Growth Trust-Review of the Interest Rate Structure-Postponement

Policy Papers ◽  
2019 ◽  
Vol 19 (21) ◽  
pp. 1
Author(s):  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Poverty Reduction ◽  
Low Income Countries ◽  
Second Stage ◽  
Rate Structure ◽  
The Interest Rate

This paper proposes to postpone the deadline for the next interest rate review by six months in light of the timing of the second stage of the Low-Income Countries (LIC) Facilities Review, and to maintain the zero percent interest rates applicable to ECF, SCF and ESF balances for this period.

2016 Poverty Reduction and Growth Trust - Review of Interest Rate Structure

Policy Papers ◽  
2016 ◽  
Vol 2016 (50) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Poverty Reduction ◽  
Low Income Countries ◽  
Credit Facility ◽  
Rate Structure ◽  
Low Interest Rates ◽  
The Interest Rate ◽  
Rate Mechanism

This paper reviews the interest rate structure that would apply to the PRGT in 2017–18. Based on the interest rate setting mechanism agreed in 2009, the interest rate for the Extended Credit Facility (ECF) would be zero and the rate for the Standby Credit Facility (SCF) would be 0.25 percent. The interest rate for the Rapid Credit Facility (RCF) was set permanently at zero in July 2015. Since the current mechanism was agreed, the Executive Board has granted successive exceptional interest waivers on all outstanding Fund concessional credit, setting all interest rates charged at zero percent. These waivers have been extended three times, providing interest rate relief to many low-income countries at a time when they faced considerable headwinds from the global economic environment. A strong case remains for maintaining zero rates on Fund concessional credit at the current global economic juncture. The global outlook for LICs has not significantly improved since the last review and downside risks remain significant. At the same time, many Directors noted at the last review in 2014 that the possibility of a prolonged period of very low interest rates warrants an early re-examination of the mechanism, including an exit strategy from repeated application of the waiver, with the objective of safeguarding the self-sustaining capacity of the PRGT. The paper seeks to respond to this call. It proposes that the PRGT interest rate mechanism be amended to accommodate anomalies created by a prolonged period of very low interest rates. Specifically, a new threshold is proposed whereby both the ECF and the SCF rate would be set at zero when the 12-month average SDR rate is less than or equal to 0.75 percent. This proposal will likely keep all PRGT interest rates under the mechanism at zero through at least 2020 given current market expectations while incurring only minimal subsidy costs and eliminating the need for continual waivers. In addition, staff proposes to waive interest rate charges on outstanding legacy balances under the Exogenous Shocks Facility (ESF), which are not determined via the interest rate mechanism, until the next review.

Poverty Reduction and Growth Trust - Review of Interest Rate Structure

Policy Papers ◽  
2014 ◽  
Vol 2014 (84) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Poverty Reduction ◽  
Exogenous Shock ◽  
Credit Facility ◽  
Rate Structure ◽  
The Interest Rate ◽  
Rate Mechanism

This paper provides the basis for the second review of the interest rate structure approved under the 2009 reforms of the Fund’s concessional lending facilities. Based on the application of the Poverty Reduction and Growth Trust (PRGT) interest rate mechanism, PRGT interest rates for 2015–16 would be zero percent for both the Extended Credit Facility (ECF) and Rapid Credit Facility (RCF), and 0.25 percent for the Stand-by Credit Facility (SCF). The interest rate on remaining balances of the Exogenous Shock Facility (ESF) is not set by the PRGT interest mechanism and it would be 0.25 percent. In accordance with the PRGT Instrument, the next review of PRGT interest rates will take place by December 31, 2016.

Poverty Reduction and Growth Trust - Review of Interest Rate Structure

Policy Papers ◽  
2011 ◽  
Vol 2011 (97) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Poverty Reduction ◽  
Rate Structure ◽  
The Interest Rate ◽  
Rate Mechanism

This is the first review of the interest rate mechanism approved under the 2009 reforms of the Fund’s concessional lending facilities. The mechanism links the Poverty Reduction and Growth Trust (PRGT) interest rate structure to world interest rates and provides a setting to differentiate interest rates across the various PRGT facilities. The framework requires reviews every two years, with the first such review to be completed by December 31, 2011.

scholarly journals Poverty Reduction and Growth Trust-Review of Interest Rate Structure

Policy Papers ◽  
2019 ◽  
Vol 19 (23) ◽  
Author(s):  
◽  
◽  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Poverty Reduction ◽  
Rate Structure ◽  
The Interest Rate ◽  
Rate Mechanism

This paper reviews the Poverty Reduction and Growth Trust (PRGT) interest rate structure for the period July 2019–June 2021. Since the interest rate mechanism was first established in 2009, no interest has been charged on PRGT credit. In line with the package of reforms proposed in the parallel Review of LIC Facilities, this paper proposes to align interest rates on the SCF with those on the ECF. Based on the average SDR rate over the most recently observed 12-month period, the proposed revised interest rate mechanism would result in zero interest rates on both ECF and SCF credit for the period July 2019–June 2021.

scholarly journals The Impact of Interest Rate Ceilings on Microfinance Industry

2015 ◽  
Vol 2 (2) ◽  
pp. 10
Author(s):  
Ali Saleh Alshebami ◽  
D. M. Khandare
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Secondary Data ◽  
Research Subject ◽  
Access To Credit ◽  
The Poor ◽  
Good Intention ◽  
The Interest Rate ◽  
The Impact

<p>Imposing ceilings on the interest rate has recently become one of the new hottest topics in microfinance industry; various debates have been discussing this issue to know the effect of interest rate ceilings on the supply of credit in particular and on microfinance industry in general. However in spite of the good intention behind these ceilings, there was no absolute result stating that ceilings have really contributed to the improvement or protection of the poor clients, indeed, these ceilings have hurt those low income people instead of helping them, due to these ceilings most of MFIs left the market or reduced their scale due to the inability to continue operating with low interest rate leaving the very poor clients without access to credit. Thus, the purpose of this paper is to review the impact of imposing such ceilings on the interest rates and to find out what alterative solutions can be employed as substitutes for them. This paper is entirely based on the secondary data collected from various records related to microfinance such as microfinance books, official websites and reports, published papers, and other sources related to the research subject.</p>

THE ROLE OF TWO INTEREST RATES IN THE INTERTEMPORAL CURRENT ACCOUNT MODEL

2012 ◽  
Vol 16 (S2) ◽  
pp. 176-189 ◽  
Author(s):  
Michał Rubaszek
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Current Account ◽  
Low Income ◽  
Developing Economies ◽  
Low Income Country ◽  
Interest Rate Spread ◽  
The Interest Rate ◽  
The Current Account

We analyze the role of the lending-deposit interest rate spread in the dynamics of the current account in developing countries. For that purpose, we extend the standard perfect-foresight intertemporal model of the current account for the existence of the interest rate spread and simulate the convergence path of developing economies. This model helps explain why in many cases it is optimal for a fast-growing, low-income country to run a balanced current account.

scholarly journals Stochastic model of microcredit interest rate in Morocco

2016 ◽  
Vol 6 (4) ◽  
pp. 268-273 ◽  
Author(s):  
Ghita Bennouna ◽  
Mohamed Tkiouat
Keyword(s):  
Interest Rate ◽  
Stochastic Model ◽  
Interest Rates ◽  
Low Income ◽  
Financial Services ◽  
Banking System ◽  
Well Being ◽  
Microfinance Institutions ◽  
Social Mission ◽  
The Interest Rate

Access to microcredit can have a beneficial effect on the well-being of low-income households excluded from the traditional banking system. It allows this population to receive affordable financial services to help them to meet their needs and to improve their living conditions. However to provide access to credit, microfinance institutions should ensure not only their social mission but also commercial and financial mission to enable the institution to perpetuate and become self-sufficient. To this end, MFIs (microfinance institutions) must apply an interest rate that covers their costs and risk, while generating profits, Also microentrepreneurs need, to this end, to ensure the profitability of their activities. This paper presents the microfinance sector in Morocco. It focuses then on the interest rate applied by the Moroccan microfinance institutions; it provides also a comparative study between Morocco and other comparable countries in terms of interest rates charged to borrowers. Finally, this article presents a stochastic model of the interest rate in microcredit built in random loan repayment periods and on a real example of the program of loans of microfinance institution in Morocco.

Poverty Reduction and Growth Trust - 2017 Borrowing Agreements with the Bank of Spain, the Government of Japan and the People's Bank of China

Policy Papers ◽  
2017 ◽  
Vol 17 (50) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Low Income ◽  
Poverty Reduction ◽  
Low Income Countries ◽  
Executive Board ◽  
Bank Of China ◽  
Current Board ◽  
The Media ◽  
The Government ◽  
Set Up

the Poverty Reduction and Growth Trust (PRGT or Trust), has entered into a new borrowing agreement with the Bank of Spain (Spain), amendments to the 2010 NPA with the Government of Japan (Japan), and a new note purchase agreement (NPA) with the People’s Bank of China (China). The new borrowing agreement with Spain, the amendments to the NPA with Japan, and the new NPA with China provide new resources of SDR 450 million, SDR 1.8 billion and SDR 800 million, respectively, to the General Loan Account of the PRGT for a total amount of SDR 3.05 billion in new PRGT lending resources. The new borrowing agreement, the augmentation under the amended NPA and the new NPA are among the first ten loan contributions concluded in the context of the current Board endorsed effort to raise SDR 11 billion in new PRGT loan resources. These became effective on February 22, 2017, for Spain; April 20, 2017, for Japan; and April 21, 2017, for China. Pursuant to Section III, paragraph 2 of the Instrument to establish the PRGT, the Managing Director is authorized to enter into borrowing agreements and agree to their terms and conditions with lenders to the Loan Accounts of the Trust. This paper presents to the Executive Board for information the new borrowing agreement with Spain, the amendments to augment the existing agreement with Japan, and the new NPA with China. The new borrowing agreement with Spain and NPA with China incorporate the following recent changes to the Fund’s framework for concessional lending to low income countries, which have also been adopted, as applicable, in prior amendments to the agreement with Japan: (i) the extensions of the commitments and drawdown period for PRGT loans to end-2020 and end-2024, respectively; (ii) the incorporation of the Chinese Renminbi (RMB) interest rate instrument of six month maturity for borrowing agreements in currencies; and (iii) the provision that, if the derived six-month SDR interest rate formula results in a negative rate, the applicable interest rate shall be zero percent. With respect to the amendment of the NPA with Japan, in addition to increasing the principal amount of notes that can be issued under the NPA, Japan’s agreement was also modified to: (i) provide more flexibility in the media of payment for purchases under the NPA; (ii) set up a maximum amount for monthly purchases under the NPA; and (iii) to establish a preferred media for payments of interest and principal amount of the notes issued under the NPA. Except for these changes, all other elements of the NPA with Japan remain unchanged.

Poverty Reduction and Growth Trust Interest Rate Mechanism - Extension of Temporary Interest Rate Waiver

Policy Papers ◽  
2012 ◽  
Vol 2012 (103) ◽  
Author(s):  
Keyword(s):  
Interest Rate ◽  
Low Income ◽  
Poverty Reduction ◽  
Economic Recovery ◽  
Low Income Countries ◽  
Executive Board ◽  
Disaster Assistance ◽  
Post Conflict ◽  
Global Growth ◽  
Rate Mechanism

In recent months, a number of Directors have expressed support in the Executive Board for a further extension of the temporary exceptional interest waiver on concessional lending. An extension would send a signal of the Fund’s continued support for Low-Income Countries at a time when the global economic crisis is still ongoing. In view of the related downside risks to the global economic recovery and a decline in the ability of Low-Income Countries to respond to a further weakening of global growth, this paper proposes a further extension of the exceptional interest waiver by two years, to end-2014. This paper also proposes to further extend to April 2013 the existing subsidization of the rate of charge on outstanding Emergency Natural Disaster Assistance and Emergency Post-Conflict Assistance purchases by PRGT-eligible members.

DETERMINAN INFLASI DI INDONESIA PERIODE 1980-2015

2016 ◽  
Vol 21 (1) ◽  
pp. 1-7
Author(s):  
Risna Risna
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Money Supply ◽  
Government Spending ◽  
Positive Impact ◽  
Secondary Data ◽  
Quantitative Approach ◽  
State Spending ◽  
Factors Affecting ◽  
The Interest Rate

This study aims to determine the effect of government spending, the money supply, the interest rate of Bank Indonesia against inflation.This study uses secondary data. Secondary data were obtained directly from the Central Bureau of Statistics and Bank Indonesia. It can be said that there are factors affecting inflationas government spending, money supply, and interest rates BI. The reseach uses a quantitative approach to methods of e-views in the data. The results of analysis of three variables show that state spending significantand positive impact on inflationin Indonesia, the money supply significantand negative to inflationin Indonesia, BI rate a significantand positive impact on inflation in Indonesia

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