IMF approves framework for new round of bilateral borrowing

The International Monetary, IMF, Executive Board yesterday approved a framework for a new round of bilateral borrowing by the IMF from January 1, 2021, to succeed the current bilateral borrowing agreements (BBAs) currently in place through end-December 2020.

A press statement made available to Business Hallmark today said the framework is broadly the same as that agreed in 2016 for the current BBAs.

According to the statement, the new BBAs will have an initial term of three years through end-2023, which is extendable by one more year through end-2024.

“ These new agreements will help maintain the IMF’s lending capacity of US$1 trillion for the next few years, ensuring its ability to respond to members’ needs.

“The BBAs are the IMF’s third line of defense after quotas and the New Arrangements Borrow (NAB). Today’s Executive Board decision is part of a broader package on IMF resources and governance reform endorsed by the IMF membership during the 2019 Annual Meetings, and builds on the Board’s January 2020 approval of a doubling of the NAB and guidance on quota reforms.

“The new BBAs and the doubling of the NAB are expected to take effect on January 1, 2021, subject to timely approvals by creditor member countries and their institutions. These are critical steps to ensure that the IMF can support its membership through the global pandemic now unfolding and beyond.