The International Monetary Fund (IMF) has approved a reduction in the cost of borrowing of debtor countries by an amount equal to 1.2 billion dollars a year.

“In a complicated global situation and at a time of high interest rates, our members reached consensus on a comprehensive package that significantly reduces borrowing costs while preserving the IMF’s financial capacity to support countries in difficulty,” explained Kristalina Georgieva, IMF Director General. “The approved measures will reduce the cost of IMF lending to members by 36%, amounting to about $1.2 billion a year. The expected number of countries subject to surcharges in fiscal year 2026 would decrease from 20 to 13.”

The approved package will take effect November 1, 2024, and will mainly benefit Ukraine, Egypt, Argentina, Ecuador, and Pakistan, the countries that are the ones paying the highest surcharges, according to research from Reuters by Boston University’s Center for Global Development Policy. Thus, Argentina should save about 3 billion dollars. The South American country is the Fund’s main debtor: it owed €48.41 billion under former President Mauricio Macri.

Georgieva further noted that “despite the substantial reductions in taxes and surcharges, they remain an important part of the IMF’s cooperative lending and risk management system, where all members contribute and all can receive support when needed. Together, fees and surcharges cover the costs of credit brokerage services, help build reserves to protect against financial risks, and provide incentives for prudent borrowing. This provides a sound financial framework that enables the IMF to provide vital balance of payments support at affordable prices.”