Definition: Stand-by arrangement

Category: External debt - IMF

An IMF lending facility established in 1952 through which a member country can use IMF financing up to a specified amount to overcome short-term or cyclical balance of payments difficulties. 

Installments are normally phased on a quarterly basis, with their release conditional upon the member’s meeting performance criteria, such as monetary and budgetary targets. 

These criteria allow both the member and the IMF to assess the member’s progress in policy implementation and may signal the need for further corrective policies. 

Stand-By Arrangements typically cover a period of one to two years (although they can extend up to three years). 

Repayments are to be made over a period of 3 1/4 to 5 years. 

The expected repayment period is shortened to 2 1/4–4 years if the country’s external position allows it to repay earlier. http://ec.europa.eu/eurostat/ramon/statmanuals/files/external_debt_guide_2003_EN.pdf#page=255