The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has said that 103 nations are seeking about $100billion from the fund as emergency financing to tackle the impact of the coronavirus (COVID-19) pandemic.
The IMF boss, who disclosed this in a blog post obtained by New Telegraph yesterday, said the fund had doubled its emergency, rapid-disbursing capacity to meet expected demand of about $100 billion, adding the IMF’s Executive Board “will have considered about half of these requests by the end of the month.”
Also as part of measures to ensure that the IMF is able to adequately respond to the fallout of the crisis, she said the Fund is reforming its Catastrophe Containment and Relief Trust, to help 29 of its poorest and most vulnerable members—of which 23 are in Africa—through rapid debt service relief.
She disclosed that the Fund was working with donors to increase its debt relief resources by $1.4 billion and was also seeking $17 billion in new loan resources to enable it triple its concessional funding through its Poverty Reduction and Growth Trust for the most vulnerable countries.
In addition, she noted that the IMF was supporting the agreement by the G20 to suspend official bilateral debt repayments, worth about $12 billion, for the poorest countries through end 2020, as well urging private sector creditors to participate in the programme.
Georgieva stressed that she was particularly concerned about emerging markets and developing countries, noting that such nations have experienced the sharpest portfolio flow reversal on record, of about $100 billion.
“For emerging economies, the IMF can engage through our regular lending instruments, including those of a precautionary nature. This may require considerable resources if further market pressures arise. To prevent them from spreading, we stand ready to deploy our full lending capacity and to mobilize all layers of the global financial safety net, including whether the use of Special Drawing Rights (SDRs) could be more helpful,” she said.
The IMF boss, however, pointed that more lending may not always be the best solution for every country and warned that the crisis “is adding to high debt burdens and many could find themselves on an unsustainable path.”