Numbers & Statistics

IMF Executive Board Approves Immediate Debt Service Relief for 25 Eligible Low-Income Countries

By  | 

Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves Immediate Debt Service Relief for 25 Eligible Low-Income Countries







April 15, 2020















WASHINGTON, DC –
The Executive Board today approved relief on debt service for 25 member
countries that are eligible for support from the Catastrophe Containmentand Relief Trust (CCRT); a further 4 countries are expected to request such
relief in the coming weeks. The approval enables the disbursement of grants
from the CCRT for repayment of total debt service falling due to the IMF
over the next six months, with potential extensions, up to a maximum of
full two years from April 14, 2020, subject to availability of sufficient
grant resources. The initial relief provided to these countries amounts to
SDR 157.1 million (US$213.4 million). Relief on debt service will free up
scarce financial resources that now can be directed toward vital emergency
medical and other relief efforts while these members combat the impact of
the pandemic.

The Managing Director has launched an urgent fundraising effort that would
enable the CCRT to provide relief on debt service for a full two years,
while leaving the CCRT adequately funded for future needs. This will
require a commitment of about US$1.4 billion. Donors have already stepped
up with pledges and contributions including a US$185 million pledge by the
United Kingdom and US$100 million provided by Japan as immediately
available resources. Other donors, including the People’s Republic of China
and the Netherlands, are also stepping forward with important
contributions.

READ ALSO  Fortsat uændret konkursniveau trods COVID-19

On March 26, the Executive Board of the International Monetary Fund (IMF)
adopted

a set of reforms to its Catastrophe Containment and Relief Trust (CCRT)

to enable the Fund to provide immediate debt service relief for its poorest
and most vulnerable members during the current COVID-19 pandemic. The CCRT
enables the IMF to deliver grants to eligible low-income countries to cover
their IMF debt service obligations in the wake of catastrophic natural
disasters and during major global public health emergencies. Eligibility
for CCRT support is limited to IMF member countries with annual per capita
GNI below the World Bank’s operational cut-off (or twice the cut-off for
small states), generally the poorest and most vulnerable member countries.


Executive Board Assessment
[1]

Executive Directors determined, effective April 14, 2020, that the COVID‑19
pandemic is a Qualifying Public Health Disaster under the Catastrophe
Containment and Relief Trust (CCRT) that is inflicting severe economic
disruption across the Fund’s membership. The crisis is creating balance of
payments needs on scale that warrant concerted international efforts to
support the poorest and most vulnerable countries through substantial
additional grant support for debt service relief. Directors also approved
the technical modifications to the CCRT Instrument, which would facilitate
operational implementation of the provision of assistance for debt relief
under the Catastrophe Containment (CC) window.

Directors agreed that the CCRT has sufficient financial resources to
deliver a first tranche of grants for debt service relief to all 29
countries with outstanding credit to the Fund that are potentially eligible
for CCRT assistance over the next six months. They agreed that 25 of these
countries that have requested such assistance meet the specific criteria
for qualification for debt service relief, and looked forward to
considering the requests for assistance of the remaining four eligible
members.

READ ALSO  Byggeomkostningerne steg lidt i første kvartal

Directors would consider committing additional tranches, up to a cap of two
years through April 13, 2022, in light of the availability of CCRT
resources at the end of each tranche period. To this end, Directors
stressed the urgency of the ongoing fundraising effort to ensure timely
delivery of assistance to the eligible countries.

Directors underscored the importance of monitoring the macroeconomic
situations of the recipient countries, including their policy responses to
pandemic, and looked forward to an update from staff toward the end of the
initial six‑month period of debt service relief. In this context, a number
of Directors highlighted the need for careful analysis of debt
sustainability, safeguards, and accountability, and called for staff
assessment on the effectiveness of country policies and use of debt service
relief resources prior to the commitment of future tranches.




[1]

At the conclusion of the discussion, the Managing Director, as
Chairman of the Board, summarizes the views of Executive Directors,
and this summary is transmitted to the country’s authorities. An
explanation of any qualifiers used in summings up can be found
here:

http://www.IMF.org/external/np/sec/misc/qualifiers.htm

.


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Wafa Amr WAmr@imf.org

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








Print Friendly, PDF & Email

Latest from finanz.dk