The International Monetary Fund (IMF) has approved reforms that will lower members’ borrowing costs by 36 percent and lift eight indebted countries out of the requirement to pay more to borrow money.
The changes agreed to by the IMF’s executive board include adjustments to the surcharges paid by countries with high levels of debt, such as Ukraine and Argentina.
The reforms, which come into effect on November 1, will raise the threshold of debt at which IMF members start paying the surcharges, lifting eight countries out of the requirement to pay the additional borrowing costs.
These countries are Benin, Ivory Coast, Gabon, Georgia, Moldova, Senegal, Sri Lanka, and Suriname.
The IMF estimates that only 11 countries will meet the requirement to pay the surcharge once the new policy begins.
The IMF’s managing director, Kristalina Georgieva, stated that the combined measures will lower borrowing costs for members by 36 percent, or about US$1.2 billion annually.
She emphasized that in a challenging global environment and at a time of high interest rates, the membership has reached consensus on a comprehensive package that substantially reduces the cost of borrowing while safeguarding the IMF’s financial capacity to support countries in need.