Washington, D.C.: The Executive Board of the International Monetary Fund (IMF) has formally completed its review of the Short-Term Liquidity Line (SLL) on December 17th. The Review concluded that the SLL will terminate in April 2027, at the end of the seven-year period following its establishment, in line with the original design of the instrument.
Introduced in 2020, the SLL was established as a revolving and renewable backstop for countries with very strong economic fundamentals, policies, and track records of policy implementation. It provides liquidity support for members facing potential short-term, moderate balance of payments difficulties, reflected in pressures on the capital account and reserves and resulting from volatility in international capital markets. The SLL aims to help prevent emerging liquidity pressures from escalating into broader macroeconomic or financial instability. Since its inception, uptake has been limited.
The 2025 review was informed by an IMF staff paper . Staff's analysis highlighted the SLL's role within the Global Financial Safety Net (GFSN) since the pandemic and its distinctive features within the IMF's precautionary toolkit, including revolving access and cost advantages. However, the review also noted that the SLL's attractiveness may be constrained compared to the FCL, which covers broader balance of payments problems, offers higher access, a longer repayment period, and has a more established signaling effect, while sharing the same qualification criteria.
An informal meeting with Executive Directors was held on November 10, 2025, to discuss the review and the future of the SLL. The staff paper considered the merit of a short-term extension of the SLL term through October 2028, to allow for a decision on the SLL to be made in the context of the next comprehensive review of the IMF instruments available for precautionary lending. A range of views was expressed by Executive Directors with indications that support for such a short-term extension would be insufficient. Qualifying countries may request approval of SLL arrangements up until it is scheduled to lapse on April 14, 2027. Pursuant to the SLL policy, approved arrangements during this period will remain in effect until the earlier of the expiration or cancellation of the arrangement by the member.
Looking ahead, a comprehensive review of the IMF's instruments available for precautionary lending is tentatively planned for 2028. This review will incorporate lessons learned since the 2023 review of the FCL, SLL and PLL , and broad-based feedback from stakeholders. The objective will be to assess the IMF's toolkit available for precautionary lending holistically, strengthen their effectiveness in supporting members' balance of payments positions and crisis prevention, and address any gaps or overlaps. The review will build on recent and ongoing work related to the Global Financial Safety Net and the Review of Program Design and Conditionality, ensuring the IMF maintains a robust, flexible, and well-communicated toolkit that supports the resilience of the GFSN and meets the evolving needs of its diverse membership.
