UAE Strengthens Commitment To Global Stability By Signing Agreements With IMF For PRGT And RST Funds

The UAE has formalised two agreements with the International Monetary Fund (IMF) to support the Poverty Reduction and Growth Trust (PRGT) and the Resilience and Sustainability Trust (RST). These agreements were signed during the World Bank Group (WBG) and IMF annual meetings in Washington, D.C., where the UAE is participating until 26th October.

The UAE's delegation at these meetings is led by Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs. It includes senior officials from the Central Bank of the UAE (CBUAE) and the Ministry of Finance. Notable members are Ibrahim Al Zaabi, Assistant Governor of the Monetary Policy and Stability Department, CBUAE, and Ahmed Al Qamzi, Assistant Governor for Banking and Insurance Supervision, CBUAE.

Al Hussaini expressed satisfaction with signing these agreements, highlighting their significance in promoting sustainable development and poverty eradication. He stated that this initiative strengthens developing economies' resilience against global challenges. "Our participation in the annual meetings of the WBG and the IMF brought together global economic and financial leaders," he said.

He further emphasised that supporting these funds aligns with a belief in international cooperation to create a sustainable future. The aim is to empower low- and middle-income countries to invest in green infrastructure and enhance their resilience against economic and climate-related issues.

During an October 2023 meeting in Marrakech, Morocco, part of the IMF and WBG gatherings, the UAE announced a $200 million contribution to co-finance the PRGT. This effort supports concessional lending to low-income countries, aligning with the United Nations Sustainable Development Goals (SDGs), particularly focusing on poverty elimination.

The PRGT was established in January 2010 as an essential tool by the IMF to assist low-income countries facing high inflation, food insecurity, debt risks, and borrowing costs. It offers concessional financing to help these nations navigate challenging economic conditions.

Focus on Climate Resilience

At COP28 hosted by the UAE from 30th November to 12th December 2023, another $200 million was pledged to the IMF's RST. This funding aims to boost climate resilience among low-income countries, preparing them better for climate change impacts.

The RSTF provides long-term concessional financing focused on climate resilience and pandemic preparedness. It targets middle- and low-income economies most vulnerable to climate change effects.

"We firmly believe that financial and economic stability form the bedrock of sustainable development," Al Hussaini noted. He expressed confidence that this partnership with the IMF would advance global sustainable development goals while reinforcing UAE's role as a key player in shaping global economics.

Currently, 69 countries qualify for PRGT financing. The IMF has expanded interest-free lending through this trust to aid its poorest members during tough economic times.

With inputs from WAM