IMF approves debt relief plan for 25 countries battling COVID-19

The International Monetary Fund (IMF) approved immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust (CCRT) to address the economic impact of COVID-19. Kristalina Georgieva, Managing Director of the IMF, said in a statement that the Executive Board approved immediate debt service relief to 25 members countries including Afghanistan, Nepal, Yemen, The Gambia, DR Congo, Niger, and Rwanda among others.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” said Georgieva.

Under the CCRT, the IMF can provide around $500 million which includes the recent pledges of $185 million and $100 million by the UK and Japan respectively. Georgieva said that other countries including China and the Netherlands are also stepping forward with “important contributions”, urging other donors to replenish the resources and boost IMF’s ability to provide additional debt relief for a full two years to poorest member countries.

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Apart from the CCRT, the IMF has approved loans for several other countries under emergency financing and Rapid Credit Facility. Last month, Georgieva had assured that the IMF is ready to respond to the threat of coronavirus including $50 billion of financial support. She said that the IMF has rapid-disbursing emergency financing of up to $10 billion for low-income countries that can be accessed without a full-fledged IMF program.

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'Concerned about low-income members'

The 66-year-old Bulgarian economist had also said that other members can access emergency financing through the Rapid Financing Instrument. Georgieva added that she is particularly concerned about low-income and more vulnerable members which may see a rapid rise in financing needs as the economic and human cost of the virus escalates.

“Our staff are currently working on identifying vulnerable countries and estimating potential financing needs should the situation deteriorate further,” she wrote in a blog.

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(Image source: AP)