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.

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.

2017 Handbook of IMF Facilities for Low-Income Countries

Policy Papers ◽  
2017 ◽  
Vol 2017 (2) ◽  
Author(s):  
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Poverty Reduction ◽  
Safety Net ◽  
Policy Coordination ◽  
Low Income Countries ◽  
Executive Board ◽  
Reference Tool ◽  
Financial Safety Net ◽  
Comprehensive Reference

This Handbook provides guidance to staff on the financial facilities and non-financial instruments for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in February 2016 (IMF, 2016d) by incorporating modifications resulting from Board papers and related decisions since that time, including Financing for Development—Enhancing the Financial Safety Net for Developing Countries—Further Considerations (IMF, 2016c), Review of Poverty Reduction and Growth Trust – Review of Interest Rate Structure (IMF, 2016b), Eligibility to Use the Fund’s Facilities for Concessional Financing (IMF, 2017a), Large Natural Disasters—Enhancing the Financial Safety Net for Developing Countries (IMF, 2017b) and Adequacy of the Global Financial Safety Net – Proposal for a New Policy Coordination Instrument (IMF, 2017c). Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions, including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the sole legal authority on the matters covered in the Handbook

A New Architecture of Facilities for Low-Income Countries

Policy Papers ◽  
2009 ◽  
Vol 09 ◽  
Author(s):  
Keyword(s):  
Low Income ◽  
Poverty Reduction ◽  
Low Income Countries ◽  
Executive Board ◽  
New Facilities

This paper proposes a new facilities architecture for Low-Income Countries. It is based on "Option 2" set out in the framework paper discussed by the Executive Board on March 20, 2009. The new architecture provides a unified facilities framework for LICs under a new Poverty Reduction and Growth Trust (PRGT). The facilities are distinguished primarily by the duration of the financing and adjustment needs and the conditionality standard.

scholarly journals Poverty Reduction And Growth Trust - 2020 Borrowing Agreements With The National Bank Of Belgium, Banco Central Do Brasil, Banque De France, The Government Of Japan, De Nederlandsche Bank NV, The Norwegian Ministry Of Finance Representing The Kingdom Of Norway, The Bank Of Spain, The Sveriges Riksbank And The Government Of The United Kingdom

Policy Papers ◽  
2020 ◽  
Vol 20 (051) ◽  
Author(s):  
Keyword(s):  
United Kingdom ◽  
Low Income ◽  
Poverty Reduction ◽  
Fast Track ◽  
Scale Up ◽  
Low Income Countries ◽  
The United Kingdom ◽  
National Bank ◽  
Ministry Of Finance ◽  
The Government

This paper presents the first set of Poverty Reduction and Growth Trust (PRGT) borrowing agreements that have been signed to respond to the unprecedented demand for concessional financing during the COVID-19 pandemic. A fast-track loan mobilization round has been instrumental to allow the Fund to raise access limits and scale up emergency financing to low-income countries (LICs). The new agreements and augmentations of existing agreements that have been finalized are from Belgium, Brazil, France, Japan, the Netherlands, Norway, Spain, Sweden and the United Kingdom. Together, these agreements provide a total of SDR 10.6 billion in new PRGT loan resources for LICs.

2016 Handbook of IMF Facilities for Low-Income Countries

Policy Papers ◽  
2016 ◽  
Vol 16 ◽  
Author(s):  
Keyword(s):  
Low Income ◽  
Poverty Reduction ◽  
Safety Net ◽  
Low Income Countries ◽  
Legal Authority ◽  
Executive Board ◽  
Poverty Reduction Strategy ◽  
Reference Tool ◽  
Financial Safety Net ◽  
Comprehensive Reference

This Handbook provides guidance to staff on the financial and non-financial facilities for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in February 2015 (IMF, 2015) by incorporating modifications resulting from Board papers and related decisions since that time, including the reform of the Fund policy on Poverty Reduction Strategy in Fund engagement with low-income countries, Financing for Development—Enhancing the Financial Safety net for Developing Countries, Proposal for Catastrophe Containment and Relief Trust, the Review of Eligibility to Use the Fund’s Facilities for Concessional Financing, and the 14th General Review of Quotas.1 Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions, including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the sole legal authority on the matters covered in the Handbook.

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.

Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries

Policy Papers ◽  
2016 ◽  
Vol 16 (19) ◽  
Author(s):  
Keyword(s):  
Financial Market ◽  
Low Income ◽  
Poverty Reduction ◽  
Commodity Prices ◽  
Safety Net ◽  
Global Environment ◽  
Low Income Countries ◽  
Executive Board ◽  
General Fund ◽  
Financial Safety Net

Better targeted support to LICs. In July 2015, the Executive Board approved measures to strengthen the financial safety net for low-income countries. Specifically, access norms and limits to the Poverty Reduction and Growth Trust (PRGT) resources were increased by 50 percent and the Rapid Credit Facility (RCF) interest rate was set permanently at zero. In addition, four countries graduated from PRGT eligibility. Together with a rebalancing of the mix of blended financing towards more use of general Fund resources for better-off PRGT-eligible countries, these reforms were broadly resource neutral and left the PRGT self-sustaining framework intact. Demand for PRGT resources up strongly. In 2015, demand reached SDR 1.5 billion, largely in response to shocks to commodity prices and adverse global financial market conditions. Demand is expected to remain elevated in 2016, as the global environment continues to be challenging.

Climate Change And Food Security In Nepal

2013 ◽  
Vol 13 ◽  
pp. 9-19 ◽  
Author(s):  
Krishna Prasad Pant
Keyword(s):  
Climate Change ◽  
Regression Analysis ◽  
Food Security ◽  
Low Income ◽  
Secondary Data ◽  
Low Income Countries ◽  
Farm Production ◽  
Agriculture And Environment ◽  
Policy Measures ◽  
The Government

Climate change is posing a threat on present and future food security in low income countries. But, the actual effect of the climate change on food security is not known. Using secondary data reported by the government, the paper examines the effects of climate change on food security in Nepal in the context of policies of commercialization of farm production. Statistical analysis is used to delineate the situation of food security in the country and regression analysis for exploring the effects of global warming on domestic production of major cereals. The results are discussed at global, national, household and individual levels empirically and qualitatively. The results suggest that a rise in minimum temperature decreases the productivity of rice increasing threat of food insecurity. The paper suggests some policy measures for improving food security situation in the country and open up some areas for further research. The Journal of Agriculture and Environment Vol:13, Jun.2012, Page 9-19 DOI: http://dx.doi.org/10.3126/aej.v13i0.7582

INTERNATIONAL DEVELOPMENT ISSUES

PEDIATRICS ◽  
1982 ◽  
Vol 70 (3) ◽  
pp. 395-395
Author(s):  
Keyword(s):  
International Development ◽  
Low Income ◽  
Development Aid ◽  
Military Expenditure ◽  
World Health ◽  
Low Income Countries ◽  
River Blindness ◽  
Eradication Programme ◽  
Set Up ◽  
Health Organization

The annual military bill is now approaching 450 billion US dollars, while official development aid accounts for less than 5 per cent of this figure. Four examples: 1. The military expenditure of only half a day would suffice to finance the whole malaria eradication programme of the World Health Organization, and less would be needed to conquer river-blindness, which is still the scourge of millions. 2. A modern tank costs about one million dollars; that amount could improve storage facilities for 100,000 tons of rice and thus save 4000 tons or more annually; one person can live on just over a pound of rice a day. The same sum of money could provide 1000 classrooms for 30,000 children. 3. For the price of one jet fighter (20 million dollars) one could set up about 40,000 village pharmacies. 4. One-half of one per cent of one year's world military expenditure would pay for all the farm equipment needed to increase food production and approach self-sufficiency in food-deficit low-income countries by 1990.

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