IMF says expects new debt limits for poor countries in 2015

 

The International Monetary Fund said on Friday it hopes to launch a new debt limits policy next year that would give poorer countries more flexibility to spend money on development priorities without undermining debt sustainability.

The IMF sets rules for how much money poorer countries can borrow to avoid burdening them with unsustainable debt, and it revises its rules every few years.

IMF Managing Director Christine Lagarde said reforms to the Fund’s debt limits policy is one of several issues that have been delayed as “building a consensus among the membership proved more challenging than anticipated.”

Liberia’s Finance Minister Amara Konneh said on Wednesday that he was talking with the IMF about relaxing lending restrictions that have capped the amount Liberia can borrow.

Sayeh said countries like Liberia that face external shocks, like the recent outbreak of Ebola, should first focus on getting grant financing from donors, as those would not affect their debt sustainability.

The IMF only provides loans to countries, though its lending currently has a zero interest rate through the end of this year.