Introduced in 2020, the SLL was designed as a revolving backstop for countries with strong economic fundamentals, offering liquidity support to members facing short-term balance of payments pressures. It aims to prevent such pressures from escalating into broader macroeconomic or financial instability. Since its inception, uptake of the SLL has been limited.
The 2025 review highlighted the SLL’s role within the Global Financial Safety Net and its unique features, including revolving access and cost advantages. However, IMF staff noted that the SLL may be less attractive compared to the Flexible Credit Line, which provides broader coverage, longer repayment periods, and a stronger signalling effect.
An informal discussion with Executive Directors on November 10 indicated limited support for extending the SLL beyond its scheduled expiration. Qualifying countries may request approval for SLL arrangements up until 14 April 2027. Any approved arrangements will remain in effect until the arrangement expires or is cancelled by the member.
Looking ahead, the IMF plans a comprehensive review of its precautionary lending instruments in 2028. The review will assess the effectiveness of the FCL, SLL, and the Precautionary and Liquidity Line, identify potential gaps, and strengthen the IMF’s toolkit to support members’ balance of payments positions and crisis prevention.
The IMF emphasises that this review will draw lessons from the 2023 evaluations of its precautionary instruments and ongoing work on the Global Financial Safety Net, ensuring a robust, flexible, and well-communicated framework for its diverse membership.
–IMF/ChannelAfrica–
