The fifth credit tranche

This paper asserts that for all practical purposes the Compensatory Financing Facility (CFF) of the IMF has been abolished except in the name by an IMF decision of 14 September 1983. Since CFF was originally intended to finance temporary and reversible deficits resulting from export shortfalls due to factors beyond a country's control, drawings were usually authorized within a month at low conditionality. The 1983 decision does away with this semi-automaticity, thereby accommodating CFF to the high-conditional upper credit tranches. This development is symptomatic of a general tendency to limit the Fund to high-conditional financing regardless of circumstances.