Arrangements by the International Monetary Fund (IMF) are successful in reducing sovereign bond spreads and restoring access to international markets, IMF economist Joe Kogan said at an analytical corner presentation.
His study of 87 IMF arrangements between 2002 and 2022 found that spreads fell after IMF Board approval of an arrangement and dropped by 45 percent within 4 years, recovering most of the spread increase from the crisis. Aside from the financing itself, the type of reforms the IMF encourages, such as debt sustainability, also help countries regain access to international markets, Kogan added.
“The results of our research are really quite positive. The IMF has always operated under the assumption that temporary financing would give a country breathing room to implement recommended reforms and put the economy back on track. By examining a large sample of IMF arrangements, we found that this really works.” Enditem
Source: Ghana Eye Report
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