On April 27, 2020 the Executive Board of the International Monetary Fund (IMF) in Washington DC completed its annual review of the Fund’s income position for the financial year ending April 30, 2020 (FY 2020) and set the margin for the lending rate for IMF credit for FY 2021 and FY 2022, says a press release.
FY 2020 income position
Net operational income, of about SDR 1.4 billion (US$1.9 billion), mainly comprising income from lending and investments, remained strong for FY 2020, broadly in line with the April 2019 estimate.
FY 2021–2022 lending rate and income position
The IMF’s basic lending rate for member countries’ use of IMF credit is the SDR interest rate plus a fixed margin.
The board sets the margin for a period of two financial years, in line with the principle that the margin should be stable and predictable.
In April 2020 the Executive Board agreed to maintain the margin for the rate of charge unchanged at 100 basis points for financial years FY 2021 and FY 2022.
Operational income for FY 2021 and FY 2022 is expected to remain strong, with projections pointing to annual net income of SDR 1.4 billion (US$1.9 billion) and SDR 1.7 billion (US$2.4 billion), respectively. However, these projections are subject to a high degree of uncertainty related to the scale of new lending associated with the COVID-19 economic fallout, as well as the timing and amounts of disbursements under approved arrangements included in the projections, IMF says.
Additional key uncertainties relate to actuarial assumptions such as the discount rate, and the performance of the Fund’s investment and retirement plan asset portfolios in the wake of the pandemic.
Continued positive projected net income will allow the IMF to continue to accumulate precautionary balances, the statement mentions.
