The International Monetary Fund (IMF) has expanded the financial lifelines for borrowing countries as the coronavirus pandemic continues to wreak economic havoc worldwide.
Since the health crisis erupted early this year, an “unprecedented number” of poor, emerging and developed countries have pleaded for monetary help. Many more are expected to come forward to seek financial relief, while those who have already accessed funds are expected to require additional financing.
As of July 13, 2020, at least 72 nations have received emergency aid and the lender said many of the beneficiaries have already “reached, or are approaching,” their borrowing quota.
“The severe impact of the COVID-19 pandemic on global economic conditions has resulted in an unprecedented number of member countries seeking financial support from the IMF,” the lender said in a statement.
To help economies access more funds and weather the crisis, the IMF executive board approved on July 13 a temporary increase in the annual limits on overall access to resources in the lender’s “General Resources Account” and “Poverty Reduction and Growth Trust.”
The new lending limits will remain in effect through April 6, 2021.
“This will allow member countries to obtain higher levels of financial support during this time period without triggering the application of the exceptional access framework,” the IMF said.
The IMF executive directors acknowledged that the coronavirus pandemic “had triggered a uniquely severe synchronised shock across the global economy and an ensuing surge in requests for financial support.”
“[The] directors recognised that many countries, in seeking to contain the impact of the pandemic and to lay the basis for economic recovery, would likely need additional financial support from the Fund in the coming year,” the IMF statement added.
Requests for financial assistance are subject to an annual limit on the access to resources that a country can obtain from its general resources, and a separate annual limit on access under its concessional facilities.
The directors agreed that financing limits in the General Resources Account will be increased from 145 to 245 of quota, and under the Poverty Reduction and Growth Trust (PRGT) from 100 percent to 150 percent of quota.
They also supported a temporary increase in the “exceptional annual access limit” under the PRGT by 50 percent of quota to 183.3 percent.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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