The executive board of the International Monetary Fund (IMF) has approved a set of policy reforms to the concessional lending facilities to better support the recovery of low-income countries (LICs) from the COVID-19 pandemic.

"These reforms are set to ensure that the Fund has the capacity to respond flexibly to LICs' needs over the medium term while continuing to provide concessional loans at zero interest rates," the IMF said Thursday in a statement.

The centerpiece of the policy reforms that were approved by the IMF executive board last week is a 45 percent increase in the normal limits on access to concessional financing, coupled with the elimination of hard limits on access for the poorest countries, according to the IMF.

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"The decision to raise access limits is not a directive to lend more across all IMF programs," Sean Nolan, deputy director of the IMF's strategy policy and review department, told reporters.

"It provides the flexibility to provide more zero interest financing for countries with strong economic programs to handle the pandemic and the path to full recovery," Nolan said.

The IMF executive board also approved a two-stage funding strategy to cover the cost of pandemic-related concessional lending and support the sustainability of the Poverty Reduction and Growth Trust (PRGT), which is tailored to the diverse needs of low-income countries.

In the first stage, the IMF will seek to secure about 4 billion U.S. dollars in subsidy resources needed to finance zero interest lending from the PRGT. Meanwhile, the IMF will seek to mobilize about 18 billion dollars in new PRGT loan resources from PRGT lenders.

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The move came as the demand from low-income countries for IMF financial support is expected to remain high over the next few years.

The IMF has provided financial support to 53 of 69 eligible low-income countries in 2020 and in the first half of 2021, with about 14 billion dollars disbursed as zero percent interest rate loans from the PRGT.