Sri Lanka is set to be removed from the International Monetary Fund’s (IMF) surcharge list of countries, once the multilateral lender’s latest lending reforms come into effect from November 1 of this year. The IMF membership recently reached a consensus on a comprehensive package that substantially reduces the cost of borrowing, while safeguarding the IMF’s financial capacity to support the countries in need. The IMF announced that its Executive Board concluded the Review of Charges and Surcharge Policy. Sri Lanka last year joined the list of 22 heavily indebted countries facing controversial surcharges imposed by the IMF. The IMF announced that Sri Lanka would be among eight countries that would no longer be subjected to Level-based surcharges. “Out of 52 member countries currently borrowing from the General Resources Account, 19 are subject to surcharges. Once the reform becomes effective on November 1, 2024, the number of countries paying surcharges will fall from 19 to 11. Surcharges are fees levied by the IMF on loans to countries whose outstanding credit to the IMF exceeds certain time-based and/or level-based thresholds. The fees add two to three percentage points to the lending rates, on top of the regular interest rates and service fees. These additional payments are aimed at countries whose outstanding credit to the IMF’s main account exceeds 187.5 percent of their quota. However, with the latest reforms, this threshold will be raised to 300 percent of a member’s quota. (ICE NEW DELHI)

Fonte notizia: The Daily Mirror