Fund Support for Debt- and Debt-Service-Reduction Operations

International Monetary Fund

No 2021/018, IMF Policy Papers from International Monetary Fund

Abstract: The note concludes that the Fund could support a member’s use of buybacks, cash sweeteners, or collateral in the context of a Fund-supported program, provided that (i) debt restructurings using buybacks, cash sweeteners or collateral offer significant efficiency gains relative to debt restructurings that do not rely on such instruments, but are underpinned by a regular Fund-supported program; and (ii) an adequate cushion of non-multilateral debt remains after the operation. The conditions under which buybacks, cash sweeteners or collateral can be expected to deliver significant efficiency gains are narrow and specified in some detail.

Keywords: PP; fund staff; DDSR Policy; Fund-financing of buyback; Fund-supported DDSROs; debtor country; Fund-financed DDSROs; cash payment; DDSRO operation; Debt relief; Debt restructuring; Debt reduction; Debt service; Currencies; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 41
Date: 2021-03-16
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