IMF approves instant debt relief for 25 poorest states

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international monetary fund

ISLAMABAD: Managing Director International Monetary Fund, Kristalina Georgieva has said that IMF Executive Board has approved immediate debt service relief to 25 of the member countries under the revamped Catastrophe Containment and Relief Trust (CCRT).
“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,” Georgieva further said in a press statement issued to TLTP on Tuesday.
The countries that will receive debt service relief are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.
“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the UK and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries,” she further said.
Meanwhile, the IMF’s recent publication ‘Policy Tracker’ of its 193 member-states has acknowledged Pakistan’s measures to contain spread of the coronavirus. It said that COVID-19 has been spreading rapidly in the past month in Pakistan, with 4,489 confirmed cases claiming 63 deaths, as of 9 April.
The fund said that the government announced relief package worth 1.2 trillion rupees to help daily wagers, common people of Pakistan and boost economy. Other measures include quarantining over three thousand travelers from Iran, closing borders with neighboring countries, international travel restrictions, school closures, social distancing measures, and lockdowns in cities and provinces across the country. Pakistan army troops were deployed to help provincial governments in their measures to contain the spread of the virus.
The government announced an economic stimulus package on the fiscal side under which key measures include an elimination of import duties on imports of emergency health equipment, relief to daily wage workers worth 200 billion rupees, 150 billion rupees for cash transfers to low-income families, accelerated tax refunds to the export industry with 100 billion rupees, and financial support of 100 billion rupees to Small and Medium Enterprises.
The economic package also earmarks resources for an accelerated procurement of wheat worth 280 billion rupees, financial support to Utility Stores worth 50 billion rupees, relief in fuel prices with 70 billion rupees, a fund of 15 billion rupees to support health and food supplies, 110 billion rupees for electricity bill payments relief, 100 billion rupees for an emergency contingency fund and a transfer of 25 billion rupees to National Disaster Management Authority for purchase of necessary equipment to deal with the pandemic.
On monetary and macro financial front, the State Bank of Pakistan has responded to the crisis by cutting the policy rate twice by a cumulative 225 basis points to 11.0 percent in the span of less than two weeks in March this year.
The State Bank also announced two new refinancing facilities. First, the ‘Temporary Economic Refinancing Facility’ worth 100 billion rupees to stimulate investment in new manufacturing plants and machinery at 7 percent fixed for 10 years. Second, the “Refinance Facility for Combating COVID-19” worth five billion rupees to support hospitals and medical centers the purchase of equipment to detect, contain, and treat COVID-19. – TLTP