In December the IMF executive board extended the temporary interest waiver on concessional loans to low-income countries (LICs) under the Poverty Reduction and Growth Trust (PRGT, see Update 82) until December 2014. The first biannual review of the PRGT interest rate mechanism, established in 2009, examined the framework which sets interest rates for each of the PRGT facilities and links the Fund’s concessional lending to world interest rates. Tim Jones, from UK NGO Jubilee Debt Campaign, said: “With global interest rates low, this decision has no financial impact on most LICs which borrow from the Fund. They would be paying zero interest anyway. A bigger question is whether IMF lending is risking future debt crises. A recent IMF review showed that LICs borrowing from the Fund have ever increasing current account deficits, potentially increasing debts and making them more vulnerable to future crises.”
IMF and World Bank policies and programmes work in tandem to expand and deepen financialisation, exacerbating the inequality crisis and harming human rights, financial stability and democratic governance
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