IMPLEMENTATION OF 

CERTAIN LEGISLATIVE PROVISIONS 

RELATING TO THE 

INTERNATIONAL MONETARY FUND 

A Report to Congress 

in accordance with 

Section 1705(a) of the International Financial Institutions Act, as amended

United States Department of the Treasury 

January 2021
Introduction 

This report is provided in accordance with legislation that requires Treasury to report to 

Congress on the status of reform efforts and policy implementation undertaken by the 

International Monetary Fund (IMF). 

IMF Policies Reform Report: Section 1705(a) of the International Financial Institutions Act, as 

amended (IFI Act), 22 U.S.C. § 262r-4(a), requires the Secretary of the Treasury to submit a 

report on the progress made by (a) the U.S. Executive Director (USED) in influencing the IMF to 

adopt various policies and reforms as described in section 1503(a) of the IFI Act, 22 U.S.C. § 

262o-2(a), and (b) the IMF in adopting and implementing the policies described in Section 

801(c)(1)(B) of the Foreign Operations, Export Financing, and Related Programs Appropriations 

Act, 2001, Pub .L. 106-429. 

Treasury supports strengthened implementation of IMF country programs and promotes sound 

policy decisions within the IMF. To achieve these goals, Treasury and the Office of the U.S. 

Executive Director (OUSED) at the IMF vigorously seek to build support for these policies in 

the IMF’s Executive Board and with IMF management. Treasury and the OUSED discuss these 

policies with IMF staff and other Board members, and the OUSED advances these reform 

policies in statements and votes on programs in the IMF Executive Board. 

In addition, Treasury’s Office of International Monetary Policy and the OUSED communicate 

with other Treasury offices and U.S. Government agencies, as appropriate, to increase awareness 

about legislative mandates and any other pertinent legislation affecting U.S. participation in the 

IMF and identify opportunities to influence IMF decisions in line with broader U.S. international 

economic policy objectives. 

Progress of the USED in Promoting Policies at the IMF Described in Section 1503(a) 

While Treasury and the OUSED continue to advance all IMF policies described in Section 

1503(a), this report specifically highlights new developments in relevant policy areas since 

October 1, 2019. 

Establishing or Strengthening Key Elements of a Social Safety Net for the Most Vulnerable

Treasury and the OUSED have supported the IMF’s robust response in meeting the financing 

needs of developing and low-income countries during the COVID-19 pandemic. Since March

2020, the IMF has provided over $100 billion in total financing to support COVID response in 

more than 80 countries. This financing has included approximately $30 billion in emergency 

lending, including $6 billion in zero-interest emergency loans to low-income countries, and $52 

billion in new and expanded precautionary credit lines for emerging markets, including Chile, 

Colombia and Peru. The IMF has also provided approximately $500 million in debt service 

relief to hard-hit low-income countries with outstanding debt to the Fund through the 

Catastrophe Containment and Relief Trust. In the records of IMF Executive Board decisions 

approving this financing, U.S. Board statements regularly called for this debt relief to free up 

fiscal space to support social safety nets for vulnerable populations in recipient countries. U.S.
Board statements also called for standardizing COVID-19 spending audits for countries 

receiving IMF financing, to prevent these funds being lost or wasted. 

Recipient countries have used IMF financing to provide support to those most vulnerable. For 

example, the Republic of Guinea increased health spending and is implementing a cash transfer 

program for poor households. The Central African Republic authorities developed a plan to 

boost health and social spending by 2% of GDP, financed by redirecting other non-essential 

spending. The Cabo Verdian authorities developed a set of emergency social protection 

measures equivalent to 1.2% of GDP, with a specific goal of helping workers in the informal 

sector, making micro finance loans to small businesses, and providing food assistance for the 

elderly and other vulnerable groups. 

The financing provided by the Fund has also provided necessary liquidity support, while 

allowing recipients time to secure additional financing from the international donor community, 

including multilateral development banks. For example, in Madagascar, total committed donor 

support reached $278 million in July after the IMF’s initial disbursement of $166 million via the 

Rapid Credit Facility approved in April. The amount of donor support reported in July was 

twice the amount previously committed at the time of the April disbursement.

Strengthening Crisis Prevention and Early Warning Signals through Surveillance of the 

National Economic Policies and Financial Market Development of Countries 

Treasury and the OUSED have supported changes to the IMF’s Debt Limits Policy intended to 

increase debt transparency in Fund programs to facilitate better decision-making by creditors and 

borrowers and advance U.S. policy goals around increasing debt sustainability. The Debt Limits 

Policy guides when and how IMF staff apply conditions on public sector borrowing in IMFsupported programs and includes various debt transparency provisions. As a result of U.S. and 

other G7 engagement, IMF program documents will now include a table with a profile of the 

holders of the country’s public debt stock and debt service, and any missing debt data will be 

addressed by the time of the second review of the program. The table will also identify debt 

subject to non-disclosure agreements. This table will substantially increase transparency of debt 

data to market participants. 

The revised Debt Limits Policy also includes an updated definition of concessional debt that

excludes grants-in-kind, which often contain terms and conditions that can obscure the true cost 

of funds, and debt that contains collateral unrelated to the project being financed. The OUSED 

encouraged and supported the IMF’s updated guidance on the requirements for disclosing 

collateralized debt by all member countries. Both Treasury and the OUSED have also pressed 

for the IMF to include conditions in its programs aimed at limiting the use of collateralized debt, 

and have urged the institution to consider collateralized debt in assessing a country’s capacity to 

repay the IMF. 

Facilitating Greater International Monetary Fund Accountability, Self-Evaluation, and 

Effectiveness

The IMF’s Independent Evaluation Office (IEO) conducted a review of the Fund’s Collaboration 

with the World Bank on Macro-Structural Issues aimed at gaining insight to further strengthen 

the effectiveness of the Fund’s collaboration with the World Bank and other international 
organizations (IOs) on structural issues. The Board endorsed such recommendations as 

establishing overarching frameworks to guide IMF-World Bank collaboration on specific issues 

and greater knowledge sharing across both institutions. The IEO also conducted a review of the 

Fund’s Institutional View on Capital Flows (IV) in preparation for upcoming Executive Board 

review of the IV in 2021. The Board welcomed the IEO findings that the core principles of the 

IV retained broad support within the membership. The U.S. Executive Director led other 

Directors in calling for any updates to the IV framework to retain its broad commitment to the 

benefits of open capital flows and to prevent the use of policy tools to affect countries’ exchange 

rates in lieu of warranted macroeconomic adjustment.

In addition to supporting the work done by the IEO, the OUSED has also led an effort among 

like-minded Executive Directors to strengthen the IMF’s enterprise risk management. As a 

result, the Office of Risk Management (ORM), which is responsible for developing and 

maintaining the IMF’s risk framework and acceptance levels, now provides more frequent 

updates on risk to the Board.

Progress of the IMF in Implementing Policies Described in Section 801(c) of the Foreign 

Operations, Export Financing, and Related Programs Appropriations Act

The IMF continues to implement the range of policies described in Section 801(c). In May 2019, 

the IMF updated its policy on conditionality in IMF lending programs. 

Financing must be disbursed (i) on the basis of specific prior reforms; or (ii) incrementally 

upon implementation of specific reforms after initial disbursement 

The IMF rapidly adapted the institution’s toolkit to respond to the effects of the pandemic, 

including raising access limits for its two emergency lending facilities: the Rapid Credit Facility 

and the Rapid Financing Instrument. Even though both instruments traditionally do not include

any conditions, Treasury and the OUSED pressed for the inclusion of governance and public 

financial management measures to help ensure emergency funding would be used to help 

respond to the COVID crisis. As countries shift toward the use of Upper Credit Tranche 

programs (programs with full conditionality and phased disbursements), Treasury and the 

OUSED have supported the use of robust conditions that address underlying structural issues, 

while still allowing for some flexibility in the phasing of reforms and the timing of IMF 

disbursements so as to accommodate the uncertainty around the current COVID crisis. Treasury 

and the OUSED have also supported the use of contingency plans and program adjustors in IMF 

program lending given the potential for a wide margin of error in program forecasts. 

Regarding debt sustainability, Treasury has pressed the IMF to advance its debt sustainability 

analyses and its work with members on longer-term financing and debt strategies in conjunction 

with reform-driven IMF programs. The IMF work in this area supports the G20’s efforts to 

establish a framework for timely and effective debt restructurings to improve members’ debt 

sustainability.