Definition: Grant-like flow

Category: External debt - IMF

Loans for which the original agreement stipulates that payments to service the debt are to be placed into an account in the borrowing country and used in the borrowing country to the benefit of that country. These transactions are treated as grants in the OECD-DAC statistics because their repayment does not require a flow of foreign currency across the exchanges. They are nevertheless counted as external debt because the creditor is nonresident. (The classification of these transactions as grants is not consistent with BPM5 recommendations. In BPM5, grants are regarded as transfers: transactions where a real resource or financial item is provided but no quid pro quo is received. In the above transaction, in return for a reduction in outstanding debt, domestic currency is provided.) http://ec.europa.eu/eurostat/ramon/statmanuals/files/external_debt_guide_2003_EN.pdf#page=255