Low-income countries can borrow from IMF, on concessional terms, which mean there is a period of time with no interest rates, through .....

2023

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Low-income countries can borrow from IMF, on concessional terms, which mean there is a period of time with no interest rates, through ____

A	Extended Credit Facility (ECF)
B	Standby Credit Facility (SCF)
C	Rapid Credit Facility (RCF)
D	All of the above

Explanation:

Detailed explanation-1: -The IMF offers various types of loans that are tailored to countries’ different needs and specific circumstances. Loans to low-income countries carry a zero interest rate.

Detailed explanation-2: -The IMF provides broad support to low-income countries (LICs) through surveillance and capacity-building activities, as well as concessional financial support to help them achieve, maintain, or restore a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.

Detailed explanation-3: -The IMF provides short-and medium-term loans to help countries that are experiencing balance of payments problems and difficulty meeting international payment obligations. IMF loans are funded mainly by quota contributions from its members.

Detailed explanation-4: -Finally, through the RST, which was established during FY 2022 and is expected to become operational by the end of 2022, the IMF will provide affordable long-term financing to help countries build resilience to external shocks and ensure sustainable growth, contributing to their long-term balance of payments stability.

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