IMF chief wants to triple favorable financing for poor members | News on the coronavirus pandemic

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The Managing Director of the International Monetary Fund, Kristalina Georgieva, said on Wednesday that the Fund is deploying all its resources to proactively respond to the challenges posed by the coronavirus pandemic and seeks to triple its concessional financing for the poorest countries in the world in more than $ 18 billion.

“We fully support members to go on the offensive to increase the IMF’s concessional financing capacity. Our goal is to triple what we do for these countries, “she said at a press conference held by videoconference.

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Earlier, Georgieva made a statement at a meeting of the Group of 20 (G20) finance ministers and central bank governors, saying that the Fund “is urgently looking for $ 18 billion in new lending resources to the Poverty Reduction and Growth Trust, and that it will likely need at least $ 1.8 billion in grants. “

She also said at the briefing that there was an “emerging consensus” to deploy existing special drawing rights (SDRs) to allow more lending to developing countries.

SDR are essentially a reserve asset created by the IMF from a basket of currencies, including the US dollar, Japanese yen, Chinese yuan, euro and British pound. Essentially an artificial currency, an SDR allocation is an inexpensive way to strengthen the international reserves of IMF member states in times of extreme tension.

But Georgieva’s statement that a consensus is being created to create new SDRs contradicts a statement by G20 financial leaders that the group had reached no consensus on the use of SDRs, that this either through a new allocation or by granting “excess” SDRs to poor countries. .

New allocation of SDRs to IMF members could add hundreds of billions of dollars in new liquidity, but the United States opposed the move, in part because it would provide vast resources to countries without conditions for China and Iran, the Reuters news agency reported. .

G20 officials called on the IMF “to explore additional tools that could meet the needs of its members as the crisis evolves, building on relevant experiences from previous crises.”

The IMF issued $ 250 billion in new SDRs to member countries in 2009, a move that boosted liquidity and market confidence in the depths of the last financial crisis.

Georgieva said she hoped a consensus built around a G20 deal to allow poor countries to suspend payments on official bilateral debt would pave the way for more consensus to increase IMF resources to deal with fallout from the pandemic.



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