WASHINGTON (Reuters) - The International Monetary Fund said on Tuesday its board approved a new three-year framework for bilateral borrowing agreements, ensuring that its full $1 trillion lending capacity will be maintained as member countries battle the coronavirus pandemic.
The new framework is broadly the same as that enacted in 2016 for agreements that allow wealthier IMF countries to lend directly to member countries in need, the IMF said. The move extends such bilateral lending from December 2020 through the end of 2023, with a one-year extension possible through the end of 2024.
The bilateral borrowing agreements are the IMF’s third line of defense after its main lending operations from quota resources - about $650 billion - and its multilateral crisis lending fund, the New Arrangements to Borrow (NAB).
The NAB currently has about $250 billion available, but IMF member countries agreed last year to double this amount to $500 billion. Bilateral borrowing agreements would make up the remainder of the IMF’s $100 trillion in lending capacity.
The IMF said that both the new bilateral framework and the expansion of the NAB would take effect on Jan. 1, 2021.
“These are critical steps to ensure that the IMF can support its membership through the global pandemic now unfolding and beyond,” the IMF said.
Reporting by David Lawder and Andrea Shalal; Editing by Chizu Nomiyama and Will Dunham