The Bank of Estonia and the International Monetary Fund (IMF) have extended a bilateral loan agreement signed in 2020 under which Estonia’s central bank is prepared to lend up to €164 million to the IMF if needed.
The agreement was initially slated to last through the end of this year, but was extended because the IMF review of its quotas, which will substantially increase its funding, has not yet come into force, according to a press release.
This means that the IMF needs to extend its loan agreements for now so that the international fund can maintain its financial capacity.
The IMF has similarly extended its loan agreements with other IMF member states that likewise signed deals in 2020.
Bilateral loan agreements are the third line of defense for the IMF, which it can use to lend to countries in difficulty, but only once the resources of its first two lines of defense have already been exhausted.
Read more: ERR.EE
