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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

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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.

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