In view of the urgent balance of payment and financing needs by world economies, the International Monetary Fund said it had approved a total of $165 billion in loans to support countries.
The IMF said the unprecedented balance of payment needs, owing to the effect of the COVID-19 pandemic, created an immediate and record breaking need for the Fund’s resources.
These were contained in the IMF’s 2020 Annual Report, released on Monday, a copy of which was made available to The Point.
“Overall, since May 1, 2019, the IMF has approved about $165 billion in loans, including those predating the pandemic,” the IMF said.
In the report titled, ‘A year like no other’, the Bretton Woods institution said, “Countries all over the world faced urgent and unprecedented balance of payments and financing needs, which created an immediate and record-breaking demand for IMF resources.
“In response to the crisis, the IMF shifted work priorities to focus on the most critical aspects, streamlined procedures to speed up decision making, and deployed staff to new assignments where they were most needed.
“Critical governance and financing reforms approved by the Executive Board demonstrated the IMF’s readiness to support countries. These timely actions helped maintain the IMF’s $1 trillion lending capacity so it can provide strong support as countries face unprecedented financing needs resulting from the pandemic.”
The Managing Director, IMF, Kristalina Georgieva, in her message, said national governments took bold steps to save lives and put a floor under the world economy, with nearly $12 trillion in fiscal actions and about $7.5 trillion in monetary actions.
According to her, the package of measures endorsed as part of the quota review approved by the Board of Governors in February 2020 preserves the Fund’s financial firepower.
“These measures include the doubling of the New Arrangements to Borrow and a new round of bilateral borrowing arrangements, which are expected to be effective in January 2021,” she stated.
The MD added that member countries also stepped up with essential contributions to IMF’s Catastrophe Containment and Relief Trust and Poverty Reduction and Growth Trust.
She noted, “These resources have allowed the IMF to commit over $100 billion to help members in need since the pandemic began. This includes providing our low-income members with much-needed debt relief, extended until April 2021, and concessional lending—including about 10 times more such lending since the crisis hit than we usually disburse in a year.
“Our response was comprehensive, supporting both members that entered the crisis with vulnerabilities such as high debt and those that have good fundamentals but needed buffers.
“In response to the crisis, we quickly focused on our members’ most critical needs. We streamlined our procedures and rapidly embraced remote work to speed up decision-making, policy discussions, technical assistance, and training.
“We created a policy tracker summarising the key economic responses of 196 economies, because sharing information, data, and analysis is a unique way we can add value for our members.”
But Georgieva stressed that while the IMF had taken unprecedented action, the outlook remained uncertain, pointing out that countries now faced a long ascent that would be difficult, uneven, uncertain, and prone to setbacks.
“With substantial space in our $1 trillion lending capacity, the IMF is ready to help even more. Working with our members—now numbering 190 with the addition of Andorra—we can build a recovery that is more resilient and inclusive for all,” she assured.