According to Reuters, the Congress in the USA has adopted a new financing law that will allow the US authorities to lend up to 21 billion dollars, approximately 226 billion Norwegian kroner given today’s exchange rate, to a fund associated with the International Monetary Fund (IMF).
The fund, called the Poverty Reduction and Growth Trust (PRGT), provides interest-free loans to support low-income countries as they work to stabilize their economies.
According to Reuters, Congress approved the bill in a vote after midnight on Saturday night.
“Today’s development marks an important milestone in the United States fulfilling its commitment to support low-income countries that continue to suffer economic damage from the pandemic, while also responding to high vulnerabilities of debt, climate risk and spillover from Russia’s war on Ukraine,” said US Treasury Secretary Janet Yellen in a statement, first reported by Reuters.
The loan of 21 billion dollars helps fulfill a promise President Joe Biden made over two years ago, where he, together with other world leaders, would give a total of 100 billion dollars to support low-income countries and countries that were vulnerable after the pandemic.
According to the IMF, they have supported more than 50 low-income countries with a sum of around USD 30 billion in interest-free loans through PRGT since the pandemic. This should have helped to reduce instability in countries such as Haiti and Nepal.
Furthermore, the IMF expects demand for PRGT loans to reach nearly $40 billion this year, more than four times the historical average.
Tags: financing law opens multibilliondollar loans
