IMF hopes to mobilise $45b for new trust

The International Monetary Fund hopes to mobilise around $45 billion for a new trust to help a broader range of countries, including some middle-income economies, deal with climate change and other longer-term challenges, a paper prepared by IMF staff and reviewed by Reuters shows.

The IMF's executive board is expected on Wednesday to approve plans for the new Resilience and Sustainability Trust (RST) that were hammered out by IMF staff after the Group of 20 major economies backed creation of the instrument in October.

Nearly three-quarters of the IMF's 190 members would be eligible to borrow from the new trust, the global lender's first facility set up expressly to help countries manage balance of payments risks posed by longerterm challenges, the paper said.

"Today, even as IMF member countries confront the immediate challenges of rising inflation, constrained fiscal space and pandemic recovery heightened by risks associated with the war in Ukraine they are also calling on the Fund to help respond to longer-term challenges such as climate change and pandemic preparedness," the paper said.

Currently, the IMF offers low-cost and zero-interest rate financing to help countries deal with short-term challenges, such as capital flight, inflation or high commodities prices, and medium-term fiscal and financial challenges.