Sri Lanka’s Finance Minister has made a request for a Rapid Financing Instrument (RFI) with the IMF. IMF has subsequently informed Minister Sabry that India had also made representations on behalf of Sri Lanka for an RFI, it added.
What is Rapid Financing Instrument (RFI) ?
- The Rapid Financing Instrument (RFI) provides rapid financial assistance, which is available to all member countries facing an urgent balance of payments need.
- The RFI was created as part of a broader reform to make the IMF’s financial support more flexible to address the diverse needs of member countries.
- The RFI provides rapid and low-access financial assistance to member countries facing an urgent balance of payments (BoP) need, without the need to have a full-fledged program in place.
- It can provide support to meet a broad range of urgent needs, including those arising from commodity price shocks, natural disasters, conflict and post-conflict situations, and emergencies resulting from fragility.
- There are two windows under the RFI: (i) a regular window, for situations of severe economic disruption, and (ii) a Large Natural Disaster (LND) window.
- Financial assistance under the RFI is provided in the form of outright purchases without the need for a full-fledged program or reviews.
- While financing under the RFI is often a one-off purchase in the case of an urgent balance of payments need of limited duration, there is scope for repeated use.
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