IMF Considers Reducing Surcharges on Excessive Borrowers
The International Monetary Fund (IMF) is considering reducing the surcharges it imposes on countries that exceed established limits for the amount or duration of loan repayments, according to a Bloomberg report on Friday, September 20.
The IMF's board of directors recently met to discuss three possible modifications to this system, also known as "surcharges."
The first proposal to alleviate the additional fees imposed on excessive borrowers involves increasing the threshold at which surcharges apply to borrowers. The second proposal aims to decrease the amount of surcharges, while the third concerns reducing the interest rate applied by the Fund on loans.
Discussions on these modifications, which could be implemented together or separately, are taking place just weeks ahead of the IMF and World Bank's autumn meetings scheduled for October.
According to American economist Joseph Stiglitz, a Nobel laureate in economics in 2001, the number of countries subject to IMF surcharges has risen from 10 in 2020 to 22 in 2023. These countries include Egypt, Tunisia, and the Seychelles.
