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Making The Imf Fit For Purpose: An Analysis And A Proposal For Reforming The Fund's Current Interest Rate Policy

Policy Brief Emiliano Libman, Maia Colodenco, Anahi Wiedenbrug, Jens van 't, Sara Murawski, Sander Tordoir, Michael Waibel

In 2024, debtor countries will pay the International Monetary Fund (IMF) an effective annual interest rate of up to 8 basis points. The current lending rate policy is procyclical, it amplifies the global spill-over ofmonetary policy and makes it harder for IMF programs to promote economic recoveries. We recommend setting a cap on the lending rate and/or devising a surcharge-sliding scale.