World Bank and IMF call for debt relief for low-income countries | The new times

The International Monetary Fund (IMF) and the World Bank Group have jointly called on official bilateral creditors to provide immediate debt relief to low-income countries bearing the impact of the novel coronavirus.

In a joint statement, the institutions said on Wednesday that the coronavirus epidemic is likely to have serious economic and social consequences for IDA countries – low-income countries.

Rwanda is a member of the International Development Association (IDA), which allows the country to obtain concessional loans and grants specifically aimed at the poorest countries.

“In light of #COVID19, this AM @KGeorgieva (Kristalina Georgieva) and I have jointly called on official bilateral creditors to suspend debt payments from @WBG_IDA countries,” World Bank President David Malpass said after their joint meeting.

According to the institutions, this will help meet the immediate liquidity needs of IDA countries to meet the challenges posed by the coronavirus epidemic and allow them time to assess the impact of the crisis and the financing needs of each country.

“We urge G20 leaders to task the WBG and the IMF with conducting these assessments, including identifying countries with unsustainable debt positions,” the statement read in part.

The statement also proposes comprehensive action by official bilateral creditors to meet both the financing and debt relief needs of IDA countries.

The World Bank and the IMF said it was imperative at this time to provide an overall sense of relief to developing countries as well as a strong signal to financial markets.

Kristalina Georgieva, Managing Director of the IMF, said on Monday that the the global economy would experience an economic recession in 2020 and the poorest countries would be the most affected.

“Advanced economies are generally better placed to respond to the crisis, but many emerging markets and low-income countries face significant challenges,” she noted.

“They are being hit hard by outflows of capital, and domestic activity will be badly hit as countries respond to the outbreak,” she added.

According to the IMF, investors have already withdrawn $83 billion from emerging markets since the start of the crisis, the largest capital outflow on record.

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