An Analysis and a Proposal for Reforming the Fund's Current Interest Rate Policy

In 2024, debtor countries will pay the International Monetary Fund (IMF) an effective
annual interest rate of up to 8 basis points. The current lending rate policy is procyclical,
it amplifies the global spill-over of monetary policy and makes it harder for IMF programs to promote economic recoveries. This T20 paper recommends setting a cap on the lending rate and/or devising a surcharge-sliding scale.

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