Coronavirus: IMF Sets Aside $1Trn For Member Countries

The International Monetary Fund (IMF) has said that it is ready to mobilize its 189 member countries with $1 trillion to cushion the economic effects of the coronavirus on member states.

The IMF Managing Director, Kristalina Georgieva, disclosed this on Monday, in a statement titled, ‘Policy   Action for a Healthy Global Economy.’

Georgieva explained that the bank would use the funds earmarked as a first line defence for countries to respond to the emergencies resulting from the pandemic, especially those countries with urgent balance of payment.

According to the bank, it has lapportioned $50 billion to emerging economies, while $10 billion could be allocated to low income countries through “concessional financing Facilities,” adding that it would be interest free.

The IMF boss stated that it had about 40 ongoing disbursing and precautionary arrangements with combined commitments of $200 billion.

Georgieva said that the Fund’s Catastrophe Containment and Relief Trust (CCRT), could assist the poorest with immediate debt relief.

IMF further appreciated UK’s $195 million pledge, which is said had increased potential debt relief fund to $400 million.

The body expressed hopes that contributions from other donors would help boost the fund from $400 million to $1 billion.

The IMF urged central banks and governments to introduce sick leaves and tax relief and address the challenges of capital flow reversal and commodity shocks.

According to the statement, “Governments should continue and expand these efforts to reach the most-affected people and businesses—with policies including increased paid sick leave and targeted tax relief.”

“So central banks’ policy action in emerging-market and developing economies will need to balance the especially difficult challenge of addressing capital flow reversals and commodity shocks. In times of crisis such as at present, foreign exchange interventions and capital flow management measures can usefully complement interest rate and other monetary policy actions,” it added.