The International Monetary and Financial Committee (IMFC), the policy-setting body of the International Monetary Fund (IMF), on Friday pledged to help emerging market and developing countries, especially low-income countries, to fight the COVID-19 outbreak.
“We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis. With a sudden stop in economic activity, global output will contract in 2020,” IMFC Chair Lesetja Kganyago and IMF Managing Director Kristalina Georgieva said in a joint statement following a conference call of the IMFC.
“Although the greatest health impact has been in advanced economies, emerging market and developing countries, especially low-income countries, will be particularly hard hit by a combination of a health crisis, a sudden reversal of capital flows and, for some, a sharp drop in commodity prices,” they warned, noting many of these countries need help to strengthen their crisis response and restore jobs and growth.
Kganyago and Georgieva noted that “strong and coordinated policy actions”, including at the multilateral level, are key to effectively resolving this global crisis.
“To this end, IMFC members welcomed the IMF’s expeditious efforts to support an exceptionally high number of countries requiring IMF emergency financing at the same time, as well as its close cooperation with other international financial institutions,” they said, adding the IMF has also taken action to provide relief for debt repayments for its poorest members.
Going beyond its traditional lending facilities, the IMF will also explore additional options to help members that experience foreign exchange shortages, according to the two officials.
“Our common goal is to make the IMF’s crisis response even more effective in helping its members achieve a faster and stronger recovery,” they said. Enditem