Extended Fund Facility EFF

In News 

• The staff-level talks between Pakistan and the International Monetary Fund (IMF) concluded for the seventh and eighth review under Extended Fund Facility (EFF). 

About Extended Fund Facility (EFF)

• It was established to provide assistance to countries experiencing serious payment imbalances because of structural impediments or slow growth and an inherently weak balance-of-payments position.
• It provides support for comprehensive programs including the policies needed to correct structural imbalances over an extended period.
• Purpose:  It supports countries’ economic programs aimed at moving toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth. 
  • The ECF may also help catalyse additional foreign aid.
• Eligibility : It is available to all Poverty Reduction and Growth Trust (PRGT)-eligible member countries that face a protracted balance of payments problem.
• Duration and repeated use. Assistance under an ECF arrangement is provided for an initial duration from three to up to five years, with an overall maximum duration of five years. 
  • Following the expiration, cancellation, or termination of an ECF arrangement, additional ECF arrangements may be approved. 
• Focused conditionality: Under the ECF, member countries agree to implement a set of policies that will help them make progress toward a stable and sustainable macroeconomic position over the medium term. 
  • These commitments, including specific conditions, are described in the country’s letter of intent.

Source:TH