IMF extends interest waiver for low income countries

WASHINGTON, DC, USA  — Caribbean Community (CARICOM) countries are to benefit from an extension of interest waiver for low-income countries from the Washington based International Monetary Fund until the end of 2016.

The IMF had initially endorsed temporary relief of interest payments on all outstanding concessional loans for Poverty Reduction and Growth Trust (PRGT) eligible members in 2009, waiving all interest payments on PRGT loans through December 2011.

An IMF statement said two subsequent extensions of the exceptional interest rate waiver were approved by the IMF Board, first to the end of December 2012 and then to the end of 2014.

"The latest action that was approved on December 11, 2014 is therefore the third extension of zero interest applied to IMF financing to the world's poorest countries," the IMF said in a brief statement.

Meanwhile, the IMF says it will now replace the three-month Eurepo rate as the euro component of the Special Drawing Rights (SDR) interest basket with the three-month spot rate for euro area central government bonds with a rating of AA and above published by the European Central Bank.

It said that this decision was taken in view of the upcoming discontinuation of the Eurepo rate as of December 31, 2014. The change in the SDR interest rate basket will be effective as of January 1, 2015, and will apply for the first time to the calculation of the weekly SDR interest rate for the interest rate period starting on Monday, January 5, 2015.

The SDR interest rate provides the basis for calculating the interest charged to members on non-concessional IMF loans from the IMF's general resources, the interest paid to IMF members on their remunerated creditor positions in the IMF, and the interest paid to members on their SDR holdings and charged on their SDR allocation.