IMF Executive Board completes 2025 review, confirms Short-Term Liquidity Line to end in April 2027
The Executive Board of the International Monetary Fund (IMF) has concluded its 2025 review of the Short-Term Liquidity Line (SLL), confirming that the facility will expire in April 2027 in line with its original seven-year design. The decision was finalized on December 17, 2025.
Launched in 2020 during the COVID-19 pandemic, the SLL was created as a revolving and renewable liquidity backstop for countries with very strong economic fundamentals, policy frameworks, and implementation track records. The facility was designed to help members address short-term and moderate balance of payments pressures arising from volatility in international capital markets, particularly stress on capital flows and foreign exchange reserves.
According to the IMF, the SLL aimed to prevent temporary liquidity pressures from escalating into broader macroeconomic or financial instability. However, since its introduction, uptake of the instrument has remained limited.
The 2025 review, based on an IMF staff paper, assessed the SLL’s role within the Global Financial Safety Net (GFSN) since the pandemic. The analysis acknowledged the facility’s distinctive features within the IMF’s precautionary lending toolkit, including revolving access and relatively favorable cost terms. At the same time, the review noted that the SLL’s appeal has been constrained when compared with the Flexible Credit Line (FCL).
Unlike the SLL, the FCL provides coverage for broader balance of payments needs, allows higher access, offers a longer repayment period, and carries a more established signaling effect in financial markets, while applying the same qualification standards.
An informal meeting of IMF Executive Directors was held on November 10, 2025, to discuss the findings and the future of the SLL. IMF staff had explored the option of a short-term extension of the SLL through October 2028, allowing a final decision to be taken alongside the next comprehensive review of precautionary lending instruments. However, Directors expressed mixed views, with indications that support for an extension would be insufficient.
As a result, countries that qualify for the SLL may request approval of arrangements until April 14, 2027, when the facility is scheduled to lapse. Any SLL arrangements approved before that date will remain in effect until their expiration or cancellation by the requesting member, in accordance with IMF policy.
Looking ahead, the IMF plans to undertake a comprehensive review of its precautionary lending instruments in 2028. This review will incorporate lessons from the 2023 assessments of the FCL, SLL, and Precautionary and Liquidity Line (PLL), as well as feedback from a broad range of stakeholders. The objective will be to strengthen the effectiveness of the IMF’s precautionary toolkit, address gaps or overlaps, and ensure continued support for members’ balance of payments stability and crisis prevention within a resilient Global Financial Safety Net.