IMF Staff Monitored Program (SMP)

March 30, 2021

When a country is not yet in a position to implement a normal IMF-supported program, the IMF can help the authorities build a track record of policy implementation through a Staff Monitored Program (SMP). An SMP is an informal agreement between national authorities and IMF staff to monitor the authorities’ economic program. SMPs resemble other Fund-supported programs in form, but are not typically required to meet normal conditionality standards and are not endorsed by the IMF Executive Board.

What is an SMP?

SMPs are informal agreements between country national authorities and IMF staff to monitor the authorities’ economic program. As such, they do not entail endorsement by the IMF Executive Board (with the exception, discussed below, of SMPs under the Heavily Indebted Poor Countries (HIPC) process). SMP staff reports are issued to the Board for information.

What is an SMP designed for?

SMPs are used in cases where a country is not yet able to implement a normal IMF-supported program, for reasons that may include limited institutional capacity, domestic fragility or instability, or absence of financing assurances. SMPs can help these member countries establish a track record of policy implementation that can pave a way for an IMF financial arrangement or for the resumption of a financial arrangement that has gone off-track, and in some cases, for repeat use of emergency assistance.

SMPs are not just for signaling purposes. That is, they are not intended to be used solely to provide signals to donors, creditors, and the general public about the strength of a country’s economic policies.

Additional uses of SMPs for LICs

In addition to the above objectives, SMPs can be used for additional purposes in the context of the HIPC Initiative: Specifically, they can be used to help highly indebted low-income countries reach the HIPC decision point; to that end, they require an assessment by the IMF Executive Board that the member’s policies under the SMP meet the policy standards associated with regular IMF lending programs and a six-month minimum of successful program implementation.

Duration

The duration of an SMP varies depending on a country’s past track record and the measures needed to establish an adequate record of policy implementation; SMP duration is for minimum of six months and is not expected to exceed 18 months.

Formal features

Even though the strength of policies under an SMP may fall short of what would be needed for IMF financial support, SMPs closely resemble IMF-supported programs in form: they are based on a quantified macroeconomic framework (with medium-term projections for the main economic and financial variables) and include periodic quantitative and structural benchmarks on key policy targets.

Monitoring

Progress under an SMP is monitored by IMF staff on a quarterly or semi-annual basis, and periodically reported to the IMF Executive Board (typically in the context of the IMF’s regular surveillance of a country’s monetary and financial system, and its economic and financial policies, also known as Article IV consultations).