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IMF Begins Zero Interest Rates

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By Modupe Gbadeyanka

Zero interest rates on all concessional facilities to low income countries have been introduced by the International Monetary Fund (IMF).

This facility, it was gathered, will last till 2018.

The move, it was further learnt, is aimed at helping under and developing countries in the world, including Nigeria.

Managing Director of IMF, Ms Christine Lagarde, speaking at the ongoing IMF/World Bank 2016 General Meeting in Washington DC, USA, said on Thursday that if the issue of inequality is to be addressed, then a strong international safety net must be put in place.

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At the conference themed ‘We can end poverty together, global problem and global solutions’, it was agreed that after 2018, low interest rates would be maintained around the world.

Ms Lagarde echoed this by saying, “In this context, I am pleased to note that our board has approved zero interest rates on all fund concessional facilities until 2018.

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“This is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending that can be far expensive.”

She added that the board had agreed to also maintain the overall lending capacity of close to one trillion dollars by extending access to bilateral borrowing agreements.

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According to her, the new agreements which would be signed this week, would run at least through the end of 2019, and would continue to serve as a third line of defence.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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