Rapid Financing Instrument Latest News
Recently, the International Monetary Fund has approved emergency funding of USD 206 million under its rapid finance instrument to help Sri Lanka address urgent needs arising from the catastrophic Cyclone Ditwah.
About Rapid Financing Instrument
- It provides prompt financial assistance to any International Monetary Fund (IMF) member country facing an urgent balance of payments need.
- It is one of the facilities under the General Resources Account (GRA) that provide financial support to countries, including in times of crisis.
Types of Rapid Financing Instrument
- Regular Window: It is for urgent balance of payments needs caused by sources including domestic instability, exogenous shocks and fragility.
- Under this, access up to 50 percent of quota per year and 100 percent of quota on a cumulative basis.
- Large natural disaster Window: It is for urgent balance of payments needs arising from natural disasters where damage is assessed to be equivalent to or exceed 20 percent of the member’s GDP.
- It provides access to up to 80 percent of quota per year and 133.33 percent of quota on a cumulative basis.
Conditionality of Rapid Financing Instrument
- Support provided without ex-post program-based conditionality or reviews (prior actions sometimes apply).
- Economic policies should aim at addressing the underlying balance of payments difficulties.Â
Source: News On Air
Rapid Financing Instrument FAQs
Q1: What is the primary purpose of the IMF's Rapid Financing Instrument (RFI)?
Ans: Balance of payments support for economic crises
Q2: Under which IMF facility is RFI provided?
Ans: General Resources Account (GRA)
