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How does the International Monetary Fund help countries with balance-of-payments deficits?

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Headquarters of the International Monetary Fund — International Monetary Fund A view of the International Monetary Fund headquarters, Washington, D.C.

The International Monetary Fund (IMF) assists member countries facing balance-of-payments deficits by providing access to money in foreign currencies, which must be repaid with interest.1

Members can immediately borrow up to 25 percent of their quota by purchasing foreign currencies with their own national currency. For larger financial needs, the IMF utilizes financial programming to determine appropriate loans and necessary macroeconomic adjustments. These loans are provided through various facilities, such as standby arrangements for short-term relief or extended-fund facilities for medium-term support.1

Assistance is typically tied to "conditionality," requiring borrowing governments to implement specific reforms—such as reducing budget deficits, deregulating industries, or lowering tariffs—to restore economic equilibrium. These measures are intended to help countries increase exports and reduce imports, ensuring they can meet their international debt obligations. The IMF uses Special Drawing Rights as its unit of account for these transactions.1