International Monetary Fund(IMF) approved a massive increase in its ability to provide interest-free loans to low income countries to help them recover from the pandemic.
The Covid-19 crisis has drained resources set aside for these countries — most are which are in sub-Saharan Africa — far faster than anticipated, and their needs will remain high, the International Monetary Fund said.
The changes, which the IMF board approved July 14, include a 45 percent increase in the limits on normal lending, and removes altogether the caps on access for the poorest countries.
However, officials made clear the IMF is not offering nations a blank check.
“The decision to raise access limits is not a directive to lend more across all IMF programs — rather, it provides the flexibility to provide more zero interest financing for countries with strong economic programs to handle the pandemic and the path to full recovery,” said Sean Nolan, deputy director of the Strategy Policy and Review Department.