The International Monetary Fund (IMF) will discuss the possibility of modifying the fees charged to its largest debtor countries. This is due to claims by some countries that costs have increased due to rising interest rates. The IMF Executive Board, composed of 190 members representing 24 countries, is meeting today to consider proposals to reduce the additional fees.
These additional payments are required if a country exceeds its borrowing limit or requests an extension of the repayment period for IMF programs. In April, the fund announced that its Executive Board would consider this matter during the summer and put forward possible proposals to address these changes, their impact on borrowers, and fund risk management.
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Any policy change requires at least 70% approval from the board members. It is not expected that a final decision will be made this week as the preliminary review will be completed during this meeting.
Reasoning behind the IMF
‘s additional fees is that they are core to its financial model, including preventing excessive borrowing and late payments. However, borrowers claim that these fees deplete funds needed for essential services such as food and healthcare; they have become even more challenging with rapid inflation and higher interest rates. The United States has expressed willingness to consider reviewing these contributions, which is seen as significant as it is one of the major donor countries to the IMF.
