IBRD Lending Rates and Spreads Applicable on or after July 1, 2025 - Quarterly Rate Update

Jul 19, 2026

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Quarterly memorandum updates IBRD’s lending rates and spreads under the Bank Policy and Directive “Financial Terms and Conditions of Bank Financing” for loans with rate setting between July 1, 2025 and September 30, 2025. It specifies average funding spreads for IBRD Flexible Loan (IFL) by currency (EUR, JPY, USD and other currencies), outlines the IFL Variable Spread structure, and defines key components including the reference rate, average funding spread, contractual lending spread, and maturity premium linked to borrower pricing groups and annual updates.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages9

Reading Time23 min

Rate Update Summary

Background

IBRD Flexible Loan Rates and Spreads

Maturity Premium

IFL Variable Spread

Reference Rate and Spread Components

Public Disclosure Authorized Public Disclosure Authorized From: The President July 28, 2025 Memorandum Subject: IBRD Lending Rates and Spreads Applicable on or after July 1, 2025 Rate Update Summary This memorandum provides the quarterly update of IBRD’s lending rates and spreads pursuant to the standard loan pricing as defined in the Bank Policy and Directive “Financial Terms and Conditions of Bank Financing”. 1 The Average Funding Spreads applicable to the IBRD Flexible Loan (IFL) effective between July 1, 2025 and September 30, 2025 have been determined based on the reference rates atthe following levels2 : • EUR denominated loans: positive 3 bps; • JPY denominated loans: negative 4 bps; • loans denominated in USD and other currencies: positive 44 bps. I. Background IBRD offers financing through one loan product, the IFL, to eligible members.3, 4 The IFL is currently available in the form of the IFL Variable Spread, featuring variable spreads over the Reference Rate.5 IBRD currently offers IFLs with the following Reference Rates6, 7, 8 : • USD: Secured Overnight Financing Rate (SOFR); • GBP: Sterling Overnight Index Average (SONIA); • JPY: Tokyo Overnight Average Rate (TONA); • EUR: Euro Interbank Offered Rate (EURIBOR) . 1 Policy “Financial Terms and Conditions of Bank Financing,” Catalogue No. OPS5 .09-POL. 182, July 1, 2025., and Directive “Financial Terms and Conditions of Bank Financing,” Catalogue No. OPS5.09-DIR.149, July 1, 2025. 2 Please see Table 1 for detailed information. 3 Aside from IFLs, there are a few historic currency pool-based products, which have been discontinued but require rate resetting in IBRD’s portfolio. The only outstanding currency pool loans (CPL) with variable rate terms are the loans to Zimbabwe, which are currently in non-accrual status. There are also IFL and CPL loans whose rates are fixed for the life of the loan through conversion and hedging. 4 In addition, IBRD offers other financial products, including conversions and risk management/hedging products, guarantees, and disaster risk financing. 5 “Proposal to Suspend the Offering of Fixed Spread Loans and Spread-Fixing Conversions in the Context of LIBOR Transition”, R2020-0243/2, December 21, 2020. 6 “Proposed Modifications to IBRD and IDA New Loan Offers and Proposed Timeline for the Existing Loans Switchover to New Market Reference Rates in the Context of LIBOR Transition,” R2021-0129, June 23, 2021. 7 “Proposed Modifications to the IBRD and IDA General Conditions to add flexibility in reference rate replacement provisions,” R2018-0235, October 18, 2018. 8 “Proposal to Manage IBOR Transition Risks in IBRD Loan and IDA Non-concessional Financing Agreements Governed by General Conditions Prior to December 2018,” R2020-0029/1, March 3, 2020. Official Use Only This memorandum summarizes the lending rates and spreads currently applicable to IBRD loans with rate setting between July 1, 2025 and September 30, 2025. II. IBRD Flexible Loan Rates and Spreads9 Maturity Premium: IBRD differentiates its loan pricing based on national income and other factors of each Borrower (see Annex 2) through the maturity premium. 10 Borrowers are classified into four pricing groups, whose applicable maturity premium is differentiated by exemptions, discounts, or surcharges specific to each pricing group. The classification of the member countries by pricing group is updated annually and becomes effective on July 1 of each year (see Annex 2 for FY26 Country Groups for IBRD Pricing) . 11 The maturity premium schedule offers Borrowers the flexibility to choose the desired maturity at the differentiated pricing level. Table 1 provides the details of the pricing group-specific maturity premium schedule 12. The details of rate structure and current pricing of the IFL Variable Spread are provided below in this section. IFL Variable Spread The pricing principle of the IFL Variable Spread is to pass through

FAQs

What period does this memorandum cover for IBRD rate setting?

It applies to loans with rate setting between July 1, 2025 and September 30, 2025.

What are the average funding spreads for the IFL for each currency during the stated effective period?

EUR-denominated loans have a positive 3 bps spread, JPY-denominated loans have a negative 4 bps spread, and USD and other currencies have a positive 44 bps spread.

How is the IFL Variable Spread constructed?

The variable spread passes through IBRD’s funding cost and consists of the reference rate plus average funding spread relative to the reference rate, contractual lending spread, and maturity premium.

Jul 19, 2026

Upload by Asher