IMF extends emergency funding by 18 months to help nations struggling due to coronavirus

In response to the COVID-19 pandemic, the International Monetary Fund on Thursday said it would extend its flexible access to emergency funding for an additional 18 months.

The Washington-based crisis lender said in a statement that its executive board agreed on Monday to raise its "cumulative access limits" under emergency financing instruments through June 2023.

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As the world faced the first wave of Coronavirus infections and deaths in April 2020, the IMF made such aid more easily accessible, including by increasing the amount of funding available to countries.

The programs have already been extended twice, once in September 2020 and once last March.

Moreover, the board decided that "all other access limits" which had been temporarily increased will return to their pre-pandemic levels on January 1, 2022, as originally scheduled. 

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"This decision reflects the expected and ongoing gradual shift to upper-credit-tranche quality arrangements from emergency financing triggered by urgent, pandemic-related balance of payment needs," the IMF said.

In addition, the statement noted that the decision guarantees member countries access to IMF emergency financing should the urgent balance of payment issues arises.

One of the tools is the Rapid Credit Facility, a program that offers free loans to low-income countries, as well as the Rapid Financing Instrument, which is available to all members of the Fund.

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In an emergency, member states can use these grants to implement policies as quickly as possible.

As part of a program designed to assist the world's poorest nations in weathering the economic crisis, the IMF approved the fifth and final round of debt relief on Monday.

(With inputs from agencies)