IMF Decision on Surcharge Policy

COLOMBO (News 1st); The IMF membership has reached consensus on a comprehensive package that substantially reduces the cost of borrowing, while safeguarding the IMF's financial capacity to support countries in need.

The IMF said its Executive Board concluded the Review of Charges and the Surcharge Policy.

Kristalina Georgieva, Managing Director of the IMF in a statement said that the membership has reached consensus on a comprehensive package that substantially reduces the cost of borrowing.

She said that the approved measures will lower IMF borrowing costs for members by 36 percent, or about US$1.2 billion annually. 

The expected number of countries subject to surcharges in fiscal year 2026 will fall from 20 to 13.

The approved package will take effect on November 1, 2024.

While substantially lowered, charges and surcharges remain an essential part of the IMF’s cooperative lending and risk management framework, where all members contribute and all can benefit from support when needed.

Together, charges and surcharges cover lending intermediation expenses, help accumulate reserves to protect against financial risks, and provide incentives for prudent borrowing. 

Kristalina Georgieva, Managing Director of the IMF said that this provides a strong financial foundation that allows the IMF to extend vital balance of payments support on affordable terms to member countries when they need it most.