IMF Executive Board approves new Food Shock Window

• Also approves an enhanced Staff-Monitored Programme with board involvement 

The IMF Executive Board has approved a new, temporary Food Shock Window (FSW) under its emergency financing instruments (Rapid Credit Facility-RCF/Rapid Financing Instrument-RFI).

The IMF noted that a combination of climate shocks and the pandemic has disrupted food production and distribution, driving up the cost of feeding people and families.  Russia’s invasion of Ukraine has pushed the price of food and fertilisers even higher and exacerbated the shortages in food supplies—hurting food importers and some exporters alike.

The FSW will provide, for a period of a year, a new channel for emergency IMF financing to member countries that have urgent balance of payment needs, due to acute food insecurity, a sharp increase in their food import bill or a shock to their cereal exports. 

Access will be consistent with the actual balance of payment needs and capped at 50 percent of quota and will be additional to the current annual access limits under the RCF/RFI. 

The cumulative access limits under the RFI regular window and the RCF exogenous shock window, currently at 150 percent of quota, will be increased to 175 percent of quota for members that will borrow through the FSW. A review is planned by the end of June 2023.

Meanwhile, the Executive Board also amended the policy for Staff-Monitored Programmes (SMPs), to allow for Programme Monitoring with Board (PMB) involvement. 

The Executive Board’s role will be limited to assessing the robustness of the member’s policies to meet the programme’s objectives and to monitoring programme implementation, including of policies, aiming to facilitate the transition to an upper credit tranche (UCT) quality IMF-supported programme. 

Countries considering an SMP would be encouraged to request a PMB, if they are the subject of an ongoing concerted international effort by creditors or donors to provide substantial new financing or debt relief or have significant outstanding IMF credit under emergency financing instruments. 
The PMB will be reviewed before the end of September 2023.