The International Monetary Fund (IMF) has introduced zero interest rates on all its concessional facilities for next two years, giving Nigeria and other countries with economic challenges to access long time concessionary facilities at zero interest.
The Managing Director of IMF, Christine Lagarde, who disclosed this at the ongoing IMF/World Bank 2016 General Meeting in Washington said after 2018 when the window closes, IMF would maintain low interest rates around the world.
Lagarde said: “If we want to address the inequality issues, we need to have a strong international safety net. In this context, I am pleased to note that our board has approved zero interest rates on all fund concessional facilities until 2018.
“This is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending that can be far expensive,’’ she said.
The IMF boss also disclosed that the board had agreed to also maintain the overall lending capacity of close to one trillion dollars by extending access to bilateral borrowing agreements.
She said that the new agreements, which would be signed this week, would run at least through the end of 2019, and would continue to serve as a third line of defence.
She said the first line being quota; second, new agreements to borrow and the third, bilateral loans. Lagarde said that IMF had so far received pledges of $ 344 billion from 26 members. She said that with strong, comprehensive, consistent and coordinated action, countries could achieve more inclusive growth.
Nigeria has been negotiating to borrow from multilateral institutions such as the IMF and World Bank to fund its capital projects.
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