IMF announces $50 billion program for coronavirus relief
International Monetary Fund Managing Director Kristalina Georgieva announced a $50 billion aid package Wednesday to help fight the coronavirus.
Georgieva said on CNBC’s “Squawk Alley” that the money is available “immediately” and is for low-income and emerging market countries.
Most of the money will be interest-free, and countries do not need to have a preexisting program with the IMF to participate, she said.
“What we’re doing right now is reviewing country by country what are the financial needs, and engaging with these countries to make sure they are aware of this resource and we can immediately respond to them,” Georgieva said. “We’re in an early stage of engagement, but I can assure you that we will act very quickly as requests come.”
There are more than 90,000 confirmed cases of the coronavirus around the world, and the outbreak has spread to six continents. The epidemic has led to severe travel restrictions in key economic hubs in China and Italy.
The IMF would like to see the money used first to bolster health-care systems and then for targeted fiscal stimulus programs and to help liquidity, Georgieva said. The organization is also working with the World Bank to help countries obtain some of the medical equipment, such as medical masks and respiratory equipment, that is used to combat the virus.
The World Bank announced a $12 billion program on Monday to help poor nations deal with the health and economic consequences of the epidemic.
Countries around the world should also consider creating measures to help the economy during an economic slowdown, such as offering lines of credit to smaller businesses and programs to pay workers who have to stay home.
“We think it is now the time to put in place precautionary measures should the outbreak become more severe,” Georgieva said.
She said earlier Wednesday at an event in Washington, D.C., that, “We are faced with a generalized weakening in demand, and that goes through confidence and through spillover channels, including trade and tourism, commodity prices, tightened financial conditions.
“They call for an additional policy response to support demand and ensure an adequate supply of credit,” she added.
The announcement comes amid coordinated action from global central banks. The U.S. Federal Reserve announced a 50 basis point cut Tuesday and the Bank of Canada followed up with a move of the same magnitude Wednesday.