IMF, World Bank demand suspending debt repayments by poorest nations
26 March, 2020
The International Monetary Fund and Environment Bank on Wednesday called for governments to place a hold on debts payments from the world's poorest nations to allow them to battle the coronavirus pandemic.
"The World Lender Group and the IMF believe it is imperative currently to provide a global sense of relief for growing countries as well as a strong signal to fiscal markets," the Washington-based production lenders said in a joint statement.
The move aims to greatly help countries that are residence to two-thirds of the world's population moving into extreme poverty -- largely in sub-Saharan Africa -- and be eligible for the most generous, low-cost loans from the International Advancement Association (IDA) financed by wealthier nations.
"The coronavirus outbreak will probably have severe economic and social implications for IDA countries" that will face "immediate liquidity needs to tackle issues posed by the coronavirus outbreak," the business said.
The IMF and Globe Bank called on the Band of 20 nations to aid the initiative for "all official bilateral creditors to suspend debt payments from IDA countries that request forbearance."
In addition, the institutions needed an analysis of the financing necessities these countries will face, and whether their total debt load is sustainable.
Section of the World Bank, the IDA is probably the largest sources of assistance for the world's 76 poorest countries, providing zero or perhaps low interest rate loans spread over 30 years or even more, and grants to some distressed nations.
In the fiscal year closing June 30, 2019, IDA commitments totaled US$22 billion, which 36 percent was presented on grant terms, in line with the World Bank.
Source: www.thejakartapost.com
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