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News: The IMF approved a $1 billion tranche for Pakistan under the $7-billion Extended Fund Facility (EFF) and $1.3 billion under the Resilience and Sustainability Facility (RSF). India abstained from voting, raising concerns over Pakistan’s track record and the risk of misuse of funds. Extended Fund Facility (EFF).
About the Extended Fund Facility (EFF)
- The EFF offers medium- to long-term financial support to countries with persistent balance of payments problems caused by structural weaknesses. It helps nations undertake deep economic reforms over extended periods.
- The assistance under the EFF is in the form of a loan that has to be paid back, and not in the form of a grant or aid.
- Eligibility: Open to all member countries; mainly used by emerging and advanced economies, but sometimes by low-income nations with the Extended Credit Facility (ECF).
Resilience and Sustainability Facility (RSF)
- Purpose: Designed to enhance the macroeconomic resilience and long-term sustainability of eligible nations.
- Target Countries: Available to low-income countries and vulnerable middle-income economies.
- Other Major IMF Lending Instruments: Includes the Extended Credit Facility (ECF), the Rapid Credit Facility (RCF) etc.
