The International Monetary Fund has asked Governors of Central Banks under its watch to keep receipts of all spending pertaining to COVID-19 bailouts and support funds from other stakeholders.
IMF Managing Director, Kristalina Georgieva, said COVID-19 era is an exceptional time that requires exceptional actions but insisted that whatever happens, the governors of the central banks must be transparent with the funds they secured and accountable in their spending.
Georgieva, who spoke at the G20 Finance Ministers and Central Bank Governors meeting at the on-going virtual Spring Meetings of the IMF/Word Bank in Washington D.C said the Fund was deploying all of its resources to proactively meet the challenges posed by the coronavirus pandemic and is looking to triple its concessional financing for the world’s poorest countries to over $18 billion.
“We have full support of the membership to go on the offensive to raise more capacity for concessional funding from the IMF. Our target is to triple what we do for those countries,” she said.
Georgieva said that the IMF has quickly responded to the call by the G20 to up its financial assistance to countries hit by the pandemic. You called on the Fund to ramp up our crisis response for emerging markets and developing countries. And we acted on this call.
“We doubled annual access limits for emergency financing. Over 100 countries have already approached us and by the end of this month, half of the requests will have been approved by our Board. Ten countries have already received emergency assistance. “This Monday our Board granted immediate relief for debt service to the IMF to 25 countries. We thank members who have made generous pledges to this effort and call on others to contribute,” she said.
Continuing, she said: “We will need to step up even more. As you know, we project a deep recession in 2020 and only a partial recovery in 2021. To help countries steer through the depth of the recession and support their recovery, we are prepared to use our full toolbox and $1 trillion firepower, mindful of the need to use programmes wisely and strengthen good governance”.
“Second, to assist our low-income countries, we plan to triple our concessional lending. We are therefore urgently seeking $18 billion in new loan resources for the Poverty Reduction and Growth Trust, and will also likely need at least $1.8 billion in subsidy resources. We will also explore whether the use of Special Drawing Rights (SDRs) could be helpful in this context.’
A new allocation of SDRs to IMF members could add hundreds of billions of dollars in new liquidity, but the US has opposed the move, in part because it would provide ample resources to countries with no conditions to China and Iran.
The IMF issued $250 billion in new SDRs to member countries in 2009, a move that boosted liquidity and market confidence during the depths of the last financial crisis.
Georgieva said she was hopeful that a consensus built around a G20 deal to allow poor countries to suspend payments on official bilateral debt would set the stage for more consensus to expand IMF resources to deal with fallout from the pandemic.
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