Amechi ogbonna
International Monetary Fund (IMF) has commended efforts by governments across the world to contain the spread of the coronavirus disease.
IMF Managing Director, Kristalina Georgieva made the remarks yesterday during an extraordinary conference call of G20 Finance Ministers and Central Bank Governors in Washington DC, USA.
She said the Fund was indeed concerned about the issue of debt of low-income countries and was prepared to do something about it.
“Starting with their debt obligations to the IMF, I am pleased to report that our Executive Board last Thursday approved a reform of the Catastrophe Containment and Relief Trust (CCRT) that allows our poorest member countries to invest in crisis response rather than repay the Fund. I want to thank G20 members who have pledged financial support for the CCRT and call on others to join. “And I support the G20 to urgently work on further easing the debt burden of our poorest members.
“At a time the world economy is at a standstill, official bilateral creditors could make a major contribution by offering a debt standstill to IDA-eligible countries, as World Bank Group President David Malpass and I proposed during our last meeting. “It will also be important for other creditors to do their part, and I count on the G20 to help build consensus on a way forward“
Thank you to the Saudi G20 presidency for calling this extraordinary meeting. She said “We welcome the decisive actions many of you have taken to shield people and the economy from COVID-19, that led to a decline in volatility in major financial markets in recent days. Nonetheless we remain very concerned about the negative outlook for global growth in 2020 and in particular about the strain a downturn would have on emerging markets and low-income countries.
“Our forecast of a recovery next year hinges on how we manage to contain the virus and reduce the level of uncertainty. “We support an ambitious G20 action plan to strengthen the capacity of health systems to cope with the epidemic; to stabilise the world economy through timely, targeted and coordinated measures; and to pave the way towards recovery. She noted
Georgieva said the Fundhad already got a strong mandate last Friday from the International Monetary and Financial Committee (IMFC), on reforms to strengthen its crisis response. In particular, she said the committee had endorsed initiatives to enhance access to the Fund’s emergency facilities, as some 85 countries indicated they rely on them for financial support. She said the scheme will also enable it build up capacity to serve poorest members; and help countries experiencing foreign exchange shortages, including possibly by short-term liquidity line. On availability of resources from the Fund to member countries, the IMF boss said, “We also have good news on IMF resources. The U.S. recently approved the doubling of the New Arrangements to Borrow, and our Executive Board yesterday agreed on a new round of bilateral borrowing to secure the IMF’s $1 trillion lending capacity.