Mr Gerry Rice, Director of Communications at the International Monetary Fund (IMF), has revealed that the Bretton Woods institution has a trillion dollars readily available to support member countries during this period of the COVID-19.
Speaking at an IMF press briefing on Thursday June 4, Mr Rice said there has been further action and progress in terms IMF support for the membership.
“I think the last time we spoke, we were closing in on 60 countries that we were supporting with our emergency financing, that number, as of yesterday is actually 66 countries, totaling about 23.5 billion in emergency financing. So, that’s 66 countries in 10 weeks or so, and we are expecting another 20 countries to be considered very soon,” he said.
He added that : “As our Managing Director, Kristalina Georgieva, said yesterday, we have a trillion dollars in financial capacity, here at the Fund to help our membership. And as this crisis continues to unfold, we have already deployed about $250 billion. This is across all IMF lending facilities.
“So just to recall, we’ve doubled access to our emergency facilities, enabling us to provide about 100 billion in financing. We expect to triple our concessional credit to low-income countries. We have provided immediate debt relief to 27 of our poorest member countries. In addition, we’ve established a new Short-Term Liquidity Line to further strengthen the global financial safety net, and of course, we’ve been leveraging our lending toolkit as I mentioned.
“And here I might note, in particular, that just last week, our Executive Board recognized the very strong policy fundamentals in Peru and Chile, and approved their requests for the IMF’s Flexible Credit Line, created to protect economies with sound policies and institutions against external shocks. So that was 24 billion for Chile, and about 11 billion for Peru.
“This supplements Flexible Credit Lines already for Colombia and Mexico for a total of $107 billion for these Flexible Credit Lines with which we are supporting our membership. You know, as I mentioned the last time, our emergency financing is provided in upfront, outright disbursements, very quickly getting financial support to member countries, and without the traditional IMF conditionality.
“That said, of course we are maintaining our commitment to address governance, and corruption vulnerabilities as they apply. We continue to promote transparency and accountability, and ensure that those resources are used for their intended purpose. As Kristalina Georgieva likes to say, we are urging countries to spend what is needed, but to keep the receipts.
“I’d also like to give you just a very quick update on the Debt Suspension Initiative. I know that’s of great interest to many of you. Just recalling this was an initiative called for my Kristalina Georgieva, and David Malpass of The World Bank sometime ago, then endorsed by the G20. So, about 73 low-income countries are eligible, and this would, potentially, mean 12 billion in debt relief for those countries.
“So far 35 countries have made formal requests, so that’s just about half of those countries eligible, and we are expecting further interest.”