Central Banks across the globe have built an $8 trillion war chest against the Coronavirus pandemic.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva disclosed this, today, during the G20 Finance Ministers and Central Bank Governors meeting. At the on-going virtual Spring Meetings.
“Thank you to the Saudi Presidency for steering the G20 in this unprecedented crisis, and to all of you for the remarkable efforts to protect people and the economy.
“8 trillion dollars of fiscal measures and ample liquidity by central banks have helped build a bridge to recovery for companies and households,” she.said.
And you stepped up with an initiative on a time-bound suspension of debt service payments for the poorest countries. I wholeheartedly welcome this timely action.
Ms. Georgieva said that the IMF has quickly responded to the call by the G20 to up its financial assistance to countries hit by the pa demic.
According to her, “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.”
The IMF boss said that her team.and world leaders were discussing a new short-term liquidity line for countries with strong policies.
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 programs wisely and strengthen good governance.
“Second, to assist our low-income countries, we plan to triple our concessional lending. We are therefore urgently seeking US$18 billion in new loan resources for the Poverty Reduction and Growth Trust, and will also likely need at least US$1.8 billion in subsidy resources. We will also explore whether the use of SDRs could be helpful in this context.
“Third, we will concentrate both lending and policy support to reduce the scarring of the economy caused by bankruptcies and unemployment, in order to support a speedy recovery. And, with many economies continuing to face capital outflows and high debt, we are ready to work closely with other international institutions and fora, as well as private stakeholders, to help our members steer through this crisis and come out of it more resilient.”