The International Monetary Fund (IMF) has approved reforms that will reduce borrowing costs for its members by 36% and exempt eight heavily indebted countries from paying additional borrowing fees.
The IMF’s executive board agreed to a series of changes, including adjustments to the surcharges imposed on countries with high debt levels, such as Ukraine and Argentina, according to a statement released on Friday. These reforms, effective from November 1, will raise the debt threshold at which surcharges are applied, removing the requirement for eight nations to pay extra borrowing costs.
The affected countries are Benin, Côte d’Ivoire, Gabon, Georgia, Moldova, Senegal, Sri Lanka, and Suriname.
The IMF estimates that, after the reforms, only 11 countries will still be required to pay the surcharges. Collectively, these changes are expected to lower borrowing costs for IMF members by about 36%, equating to US$1.2 billion annually, according to IMF Managing Director Kristalina Georgieva.
“In today’s challenging global environment, with high interest rates, our membership has reached consensus on a package that significantly cuts borrowing costs while ensuring the IMF can continue to support countries in need,” Georgieva stated.
