Some board members called for a review of the bonus policy. Argentina, Ecuador, Egypt, Ukraine are among the largest payers of fees.
The International Monetary Fund plans to discuss a review of the fees charged to its largest borrowers. The decision was driven by concerns in some countries that high interest rates make costs prohibitive. Bloomberg wrote this on Monday, July 8.
The IMF’s 24-member board of directors representing 190 countries at the Washington-based crisis lender and a management spokesman are set to weigh options on Monday to give countries a break from paying surcharges, the sources said. .
The levy applies to countries that borrow more than they are allocated or take longer to repay program debts.
The IMF said in April that its executive board would begin considering the fee issue this summer, which “may present options for possible changes” and would consider the implications for borrowers and management. fund risk. A 70% vote of the Board of Directors is required to approve policy changes.
A final decision is not expected this week.
For years, the IMF has adopted fees to prevent the biggest borrowers from becoming too dependent on lenders. While the fees swelled the fund’s coffers, they also added billions of dollars in additional costs to countries.
Higher global interest rates, especially from the US Federal Reserve and the European Central Bank, mean that the total rate on some IMF loans is above 8%. This is double the number before the COVID-19 pandemic. The burden is mainly borne by several countries, including Argentina, Egypt and Ukraine, which must pay $6 billion.
Ukraine has a debt of 348 million.
The IMF explained that the levy is a necessary part of the financial model, which aims to prevent borrowing too much or paying back too long. While borrowers remember that additional fees drain resources.
The IMF’s largest shareholder, the United States, has already signaled that it is willing to review the cost of the fees.
Earlier, the IMF published an updated memorandum on Ukraine, the fulfillment of the conditions of which will determine additional support for Ukraine.
The IMF has also reportedly worsened its forecast for Ukraine’s GDP.
Source: korrespondent
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