IMF Extends Debt Service Payment For 28 Countries By Six Months

The International Monetary Fund has approved a second debt service relief of six months for 28 low income countries.

The Washington based lender said in a statement that the approval was made by it’s Executive Board on October 2, 2020.

The moratorium granted under the Catastrophe Containment and Relief Trus, would help the benefiting countries concentrate on fighting the economic impact of the Covid-19 pandemic.

Africa has the highest number of those benefiting with about 18 countries eligible for the six-month debt service relief.

The IMF stated that the debt service relief covers the period October 14, 2020 through April 13, 2021.

The multateal lender had on April 14 this year approved the first six-month relief which lasted between April 14 to October 13, 2020.

The approval made in April enables the disbursement of grants from the CCRT for payment of eligible debt service which will be due to the IMF from October 14, 2020 to April 13, 2021, worth $227m.

It said, “Subject to the availability of sufficient resources in the CCRT, debt service relief could be provided for a total period of two years, through April 13, 2022, estimated at nearly SDR 680 ($959m).”

The IMF hopes the relief on debt service will free up scarce financial resources for vital emergency medical and other relief efforts as the impact of the pandemic inflicts economic pressure on the members.

Following the approval of the first relief, the IMF launched an urgent fundraising effort that would enable the CCRT to provide relief on debt service for up to a maximum of two years, while leaving the CCRT adequately funded for future needs.

The relief requires $1.4bn, however, donors have provided grant contributions totaling about $57.7m.

The donors include the UK, Japan, Germany, the Netherlands, Switzerland, Norway, China, Mexico, Sweden, Bulgaria, Luxembourg, and Malta.