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Showing posts with label IMF. Show all posts

#COVID19: IMF approves $5.2 bn, 1-year loan program for Egypt

#COVID19: IMF approves $5.2 bn, 1-year loan program for Egypt



The board of the International Monetary Fund on Friday approved a one-year, $5.2 billion financing package for Egypt to help the country alleviate the economic impact of the COVID-19 pandemic.

The new funding under a standby arrangement comes on top of $2.8 billion the IMF board approved a month ago, although at the time officials acknowledged that more help would be needed.

According to IMF, executive board approved a new $5.2 billion, 12-month Stand-By Arrangement that aims to help the country cope with the coronavirus pandemic and plug budget and balance-of-payments shortfalls.

In a statement, the IMF said the program "would also help the authorities preserve the achievements made over the past four years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms."


The board of the International Monetary Fund on Friday approved a one-year, $5.2 billion financing package for Egypt to help the country alleviate the economic impact of the COVID-19 pandemic.

The new funding under a standby arrangement comes on top of $2.8 billion the IMF board approved a month ago, although at the time officials acknowledged that more help would be needed.

According to IMF, executive board approved a new $5.2 billion, 12-month Stand-By Arrangement that aims to help the country cope with the coronavirus pandemic and plug budget and balance-of-payments shortfalls.

In a statement, the IMF said the program "would also help the authorities preserve the achievements made over the past four years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms."

COVID-19: Kenya, Uganda receive IMF help against pandemic

COVID-19: Kenya, Uganda receive IMF help against pandemic

Washington (AFP) - The IMF on Wednesday approved a $739 million emergency loan for Kenya and $491.5 million for Uganda, as the East African countries deal with the coronavirus pandemic.

Both face severe economic shocks amid efforts to contain the spread of COVID-19, the Washington-based crisis lender said in announcing the latest fast-disbursing aid as it rushes to help countries deal with the economic impact of the outbreak.

More than 100 IMF members have sought emergency financing, and the fund has warned that the world's poorest countries are most at risk.

The funding will help Kenya "provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis," IMF Deputy Managing Director Tao Zhang said in a statement.

The money for Uganda will aid the country's "urgent balance of payments and budget support needs," Zhang said.

The two countries will receive funds under the Rapid Credit Facility, which is aimed at the world's poorest nations and has been doubled in size to quickly dispense aid.

The coronavirus pandemic has caused business disruptions worldwide, with flights canceled and countries implementing strict border policies to keep out infected travelers, and the IMF warned Kenya's main economic sectors tourism, transportation and trade are imperiled.

"The impact of COVID-19 on the Kenyan economy will be severe. It will act through both global and domestic channels, and downside risks remain large," the IMF said.

Uganda is similarly threatened, and the government there has stepped up health spending, widening its deficit, which the IMF said is appropriate given the importance of stopping the virus.

"The global COVID-19 pandemic is expected to severely hit the Ugandan economy through several channels, with detrimental effects on economic activity and social indicators. The external and fiscal accounts are expected to deteriorate, creating substantial urgent external and fiscal financing needs," Zhang said.


Washington (AFP) - The IMF on Wednesday approved a $739 million emergency loan for Kenya and $491.5 million for Uganda, as the East African countries deal with the coronavirus pandemic.

Both face severe economic shocks amid efforts to contain the spread of COVID-19, the Washington-based crisis lender said in announcing the latest fast-disbursing aid as it rushes to help countries deal with the economic impact of the outbreak.

More than 100 IMF members have sought emergency financing, and the fund has warned that the world's poorest countries are most at risk.

The funding will help Kenya "provide much-needed resources for fiscal interventions to safeguard public health and support households and firms affected by the crisis," IMF Deputy Managing Director Tao Zhang said in a statement.

The money for Uganda will aid the country's "urgent balance of payments and budget support needs," Zhang said.

The two countries will receive funds under the Rapid Credit Facility, which is aimed at the world's poorest nations and has been doubled in size to quickly dispense aid.

The coronavirus pandemic has caused business disruptions worldwide, with flights canceled and countries implementing strict border policies to keep out infected travelers, and the IMF warned Kenya's main economic sectors tourism, transportation and trade are imperiled.

"The impact of COVID-19 on the Kenyan economy will be severe. It will act through both global and domestic channels, and downside risks remain large," the IMF said.

Uganda is similarly threatened, and the government there has stepped up health spending, widening its deficit, which the IMF said is appropriate given the importance of stopping the virus.

"The global COVID-19 pandemic is expected to severely hit the Ugandan economy through several channels, with detrimental effects on economic activity and social indicators. The external and fiscal accounts are expected to deteriorate, creating substantial urgent external and fiscal financing needs," Zhang said.


IMF Approves $3.4bn For Nigeria to address economic impact of COVID-19

IMF Approves $3.4bn For Nigeria to address economic impact of COVID-19


The board of the International Monetary Fund (IMF) on Tuesday approved the sum of $3.4 billion to support Nigeria’s COVID-19 fight, the highest so far to any member country.

IMF
✔@IMFNews
The IMF Executive Board today approved US$3.4 billion to help #Nigeria address the severe economic impact of the #COVID19 pandemic and the sharp fall of oil prices. http://ow.ly/SRk450zr076 #IMFAfrica


The assistance, facilitated via the Rapid Financing Instrument (RFI), will help limit the decline in Nigeria’s international reserves “and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices,” the IMF said.

The Body approved Nigeria’s request for emergency financial assistance of SDR 2,454.5 million (US$ 3.4 billion, 100 percent of quota) under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.

"The near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased. Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels. The pandemic—along with the sharp fall in oil prices—has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs." IMF said/

"The IMF financial support will help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices."

"The IMF remains closely engaged with the Nigerian authorities and stands ready to provide policy advice and further support, as needed."

Following the Executive Board’s discussion of Nigeria, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:

“The COVID-19 outbreak—magnified by the sharp fall in international oil prices and reduced global demand for oil products—is severely impacting economic activity in Nigeria. These shocks have created large external and financing needs for 2020. Additional declines in oil prices and more protracted containment measures would seriously affect the real and financial sectors and strain the country’s financing.

“The authorities’ immediate actions to respond to the crisis are welcome. The short-term focus on fiscal accommodation would allow for higher health spending and help alleviate the impact of the crisis on households and businesses. Steps taken toward a more unified and flexible exchange rate are also important and unification of the exchange rate should be expedited.

“Once the COVID-19 crisis passes, the focus should remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to keep Nigeria’s debt sustainable and create fiscal space for priority spending. Implementation of the reform priorities under the Economic Recovery and Growth Plan, particularly on power and governance, remains crucial to boost growth over the medium term.

“The emergency financing under the RFI will provide much needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support the government’s efforts and close the large financing gap. The implementation of proper governance arrangements—including through the publication and independent audit of crisis-mitigating spending and procurement processes—is crucial to ensure emergency funds are used for their intended purposes.”


Source: IMF


The board of the International Monetary Fund (IMF) on Tuesday approved the sum of $3.4 billion to support Nigeria’s COVID-19 fight, the highest so far to any member country.

IMF
✔@IMFNews
The IMF Executive Board today approved US$3.4 billion to help #Nigeria address the severe economic impact of the #COVID19 pandemic and the sharp fall of oil prices. http://ow.ly/SRk450zr076 #IMFAfrica


The assistance, facilitated via the Rapid Financing Instrument (RFI), will help limit the decline in Nigeria’s international reserves “and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices,” the IMF said.

The Body approved Nigeria’s request for emergency financial assistance of SDR 2,454.5 million (US$ 3.4 billion, 100 percent of quota) under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.

"The near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased. Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels. The pandemic—along with the sharp fall in oil prices—has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs." IMF said/

"The IMF financial support will help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices."

"The IMF remains closely engaged with the Nigerian authorities and stands ready to provide policy advice and further support, as needed."

Following the Executive Board’s discussion of Nigeria, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:

“The COVID-19 outbreak—magnified by the sharp fall in international oil prices and reduced global demand for oil products—is severely impacting economic activity in Nigeria. These shocks have created large external and financing needs for 2020. Additional declines in oil prices and more protracted containment measures would seriously affect the real and financial sectors and strain the country’s financing.

“The authorities’ immediate actions to respond to the crisis are welcome. The short-term focus on fiscal accommodation would allow for higher health spending and help alleviate the impact of the crisis on households and businesses. Steps taken toward a more unified and flexible exchange rate are also important and unification of the exchange rate should be expedited.

“Once the COVID-19 crisis passes, the focus should remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to keep Nigeria’s debt sustainable and create fiscal space for priority spending. Implementation of the reform priorities under the Economic Recovery and Growth Plan, particularly on power and governance, remains crucial to boost growth over the medium term.

“The emergency financing under the RFI will provide much needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support the government’s efforts and close the large financing gap. The implementation of proper governance arrangements—including through the publication and independent audit of crisis-mitigating spending and procurement processes—is crucial to ensure emergency funds are used for their intended purposes.”


Source: IMF

UN Secretary-General's remarks to virtual IMF/World Bank High-level Meeting Mobilizing with Africa

UN Secretary-General's remarks to virtual IMF/World Bank High-level Meeting Mobilizing with Africa

UN Secretary-General's António Guterres

[as delivered]


I thank the African Union, International Monetary Fund and World Bank Group for bringing us together to Mobilize with Africa.

Let me begin by expressing my total solidarity with the people and governments of Africa in the epic global effort to tackle the COVID-19 pandemic.

I commend your early action.

The African Union and the African continent have shown unity and leadership – two of the most scarce commodities at the present time.

We need to target every ounce of energy against COVID-19.

We know this virus will spread like wildfire and there are no firewalls.

And as with the climate crisis, the African continent could end up suffering the greatest from a crisis that is not of its making.

And let’s be clear, this is far more than a health crisis. It is a human crisis.

It is not just a health pandemic. It is a jobs pandemic. A humanitarian pandemic. A development pandemic.

In Africa, households and businesses were suffering liquidity challenges and other pressures even before the virus got a toehold on the continent.

The development emergency had already hit before the health emergency, but now countries will need to battle both – with millions more Africans plunged into poverty.

Meanwhile, already unacceptable levels of inequalities are growing, fragility increasing, commodity prices declining, and hard-won development gains are under threat.

To help address the devastating economic and social consequences, I have been since the beginning asking for a comprehensive global response package amounting to a double-digit percentage of global Gross Domestic Product.

This, by the way, is assumed by several developed countries with their own domestic programs.

For Africa, that means more than $200 billion.

To get there, we must mobilize all partners.

I commend swift actions by the IMF and World Bank Group to support member countries and the strong commitment of both the International Monetary and Financial Committee and the Development Committee to enhance access to facilities and tools.

But we need greater resources for the IMF, including through the issuance of Special Drawing Rights, and enhanced support for the World Bank Group and other International Financial Institutions and bilateral mechanisms.

Alleviating crushing debt is absolutely crucial.

I welcome G20 steps, including the suspension of debt service payments for all IDA countries.

That’s a start. But the severity of the crisis demands more.

Many other developing countries are highly vulnerable and already in debt distress – or will become distressed with the global recession.

In Africa, the average debt-to-GDP ratio has increased from 39.5 per cent in 2011, to 61.3 per cent in 2019.

In my view, we need a comprehensive debt framework with three phases:
First, an across-the-board debt standstill for all those developing countries that have no access to financial markets and cannot service their debt
Second, more comprehensive options towards debt sustainability with instruments such as debt swaps and a debt mechanism for the Sustainable Development Goals
Third, addressing structural issues in the international debt architecture to prevent defaults leading to prolonged financial and economic crises

In all our efforts, we must focus on the most vulnerable and ensuring that the rights of all people are protected.

That means securing and building on progress on gender equality and women’s rights – and emphasizing the need for women’s leadership on COVID-19 recovery and response.

It means focusing on the impact of the virus on children, persons with disabilities, and other vulnerable populations.

Refugees, displaced persons and others caught up in conflict face special vulnerabilities – this is why I appealed for a global ceasefire.

It is also why the UN has launched its Global Humanitarian Response Plan, much of which is devoted to the African continent, and that must be fully funded by the international community.

I welcome African commitment to ensure coordination and humanitarian access.

The UN System supply chain network has started its “Solidarity Flights” to distribute vital medical supplies across the continent.

Finally, we are also working closely with WHO and others to build an international coalition to advance a vaccine as soon as possible.

My core message is simple: that vaccine must be available and affordable for everyone, everywhere.

It must be considered a global public good.

Exceptional times demand exceptional solidarity.

One of the most important tests of that global solidarity is by mobilizing with Africa for shared prosperity of the continent and the world.

Rest assured, my actions will continue to echo and reinforce the call of so many African leaders who have rightly said: “Only victory in Africa can end the pandemic everywhere”.

Thank you.


Source
UN Secretary-General's António Guterres

[as delivered]


I thank the African Union, International Monetary Fund and World Bank Group for bringing us together to Mobilize with Africa.

Let me begin by expressing my total solidarity with the people and governments of Africa in the epic global effort to tackle the COVID-19 pandemic.

I commend your early action.

The African Union and the African continent have shown unity and leadership – two of the most scarce commodities at the present time.

We need to target every ounce of energy against COVID-19.

We know this virus will spread like wildfire and there are no firewalls.

And as with the climate crisis, the African continent could end up suffering the greatest from a crisis that is not of its making.

And let’s be clear, this is far more than a health crisis. It is a human crisis.

It is not just a health pandemic. It is a jobs pandemic. A humanitarian pandemic. A development pandemic.

In Africa, households and businesses were suffering liquidity challenges and other pressures even before the virus got a toehold on the continent.

The development emergency had already hit before the health emergency, but now countries will need to battle both – with millions more Africans plunged into poverty.

Meanwhile, already unacceptable levels of inequalities are growing, fragility increasing, commodity prices declining, and hard-won development gains are under threat.

To help address the devastating economic and social consequences, I have been since the beginning asking for a comprehensive global response package amounting to a double-digit percentage of global Gross Domestic Product.

This, by the way, is assumed by several developed countries with their own domestic programs.

For Africa, that means more than $200 billion.

To get there, we must mobilize all partners.

I commend swift actions by the IMF and World Bank Group to support member countries and the strong commitment of both the International Monetary and Financial Committee and the Development Committee to enhance access to facilities and tools.

But we need greater resources for the IMF, including through the issuance of Special Drawing Rights, and enhanced support for the World Bank Group and other International Financial Institutions and bilateral mechanisms.

Alleviating crushing debt is absolutely crucial.

I welcome G20 steps, including the suspension of debt service payments for all IDA countries.

That’s a start. But the severity of the crisis demands more.

Many other developing countries are highly vulnerable and already in debt distress – or will become distressed with the global recession.

In Africa, the average debt-to-GDP ratio has increased from 39.5 per cent in 2011, to 61.3 per cent in 2019.

In my view, we need a comprehensive debt framework with three phases:
First, an across-the-board debt standstill for all those developing countries that have no access to financial markets and cannot service their debt
Second, more comprehensive options towards debt sustainability with instruments such as debt swaps and a debt mechanism for the Sustainable Development Goals
Third, addressing structural issues in the international debt architecture to prevent defaults leading to prolonged financial and economic crises

In all our efforts, we must focus on the most vulnerable and ensuring that the rights of all people are protected.

That means securing and building on progress on gender equality and women’s rights – and emphasizing the need for women’s leadership on COVID-19 recovery and response.

It means focusing on the impact of the virus on children, persons with disabilities, and other vulnerable populations.

Refugees, displaced persons and others caught up in conflict face special vulnerabilities – this is why I appealed for a global ceasefire.

It is also why the UN has launched its Global Humanitarian Response Plan, much of which is devoted to the African continent, and that must be fully funded by the international community.

I welcome African commitment to ensure coordination and humanitarian access.

The UN System supply chain network has started its “Solidarity Flights” to distribute vital medical supplies across the continent.

Finally, we are also working closely with WHO and others to build an international coalition to advance a vaccine as soon as possible.

My core message is simple: that vaccine must be available and affordable for everyone, everywhere.

It must be considered a global public good.

Exceptional times demand exceptional solidarity.

One of the most important tests of that global solidarity is by mobilizing with Africa for shared prosperity of the continent and the world.

Rest assured, my actions will continue to echo and reinforce the call of so many African leaders who have rightly said: “Only victory in Africa can end the pandemic everywhere”.

Thank you.


Source

COVID-19: IMF approves $1.4 billion in coronavirus aid to Pakistan

COVID-19: IMF approves $1.4 billion in coronavirus aid to Pakistan

International Monetary Fund (IMF) has approved $1.4 billion in coronavirus aid to Pakistan, AFP reported on Thursday.

The IMF approved nearly $1.4 billion in emergency aid to Pakistan to help it weather the impact of the coronavirus pandemic. "While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs," the international lender said in a statement.

Pakistan has recorded just over 100 deaths but experts have voiced fear that the country of 215 million people could see a rapid and devastating increase due to its shortage of medical infrastructure and crowded cities.

Worried about hurting an already weak economy, Prime Minister Imran Khan has resisted a sweeping, nationwide lockdown but provinces have shuttered schools and companies.

"The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing," said Geoffrey Okamoto, the IMF's first deputy managing director.

"This has created an urgent balance of payments need," he said.

He voiced support for actions taken in Pakistan including a boost in spending on public health and the social safety net to brace for a worsening crisis.

He also credited the central State Bank of Pakistan with measures that have included lowering its benchmark rate and supporting liquidity.

The IMF said it was providing the $1.386 billion under a so-called rapid financing instrument, which addresses emergencies and does not subject a country to a full-fledged reform program that undergoes review.

Pakistan is a longtime recipient of help from the IMF and is already under a three-year, $6 billion program that was approved last year.

Okamoto said Pakistan needed to recommit to its goals under the package once the crisis abates, including restoring its public finances and governance.
International Monetary Fund (IMF) has approved $1.4 billion in coronavirus aid to Pakistan, AFP reported on Thursday.

The IMF approved nearly $1.4 billion in emergency aid to Pakistan to help it weather the impact of the coronavirus pandemic. "While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs," the international lender said in a statement.

Pakistan has recorded just over 100 deaths but experts have voiced fear that the country of 215 million people could see a rapid and devastating increase due to its shortage of medical infrastructure and crowded cities.

Worried about hurting an already weak economy, Prime Minister Imran Khan has resisted a sweeping, nationwide lockdown but provinces have shuttered schools and companies.

"The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing," said Geoffrey Okamoto, the IMF's first deputy managing director.

"This has created an urgent balance of payments need," he said.

He voiced support for actions taken in Pakistan including a boost in spending on public health and the social safety net to brace for a worsening crisis.

He also credited the central State Bank of Pakistan with measures that have included lowering its benchmark rate and supporting liquidity.

The IMF said it was providing the $1.386 billion under a so-called rapid financing instrument, which addresses emergencies and does not subject a country to a full-fledged reform program that undergoes review.

Pakistan is a longtime recipient of help from the IMF and is already under a three-year, $6 billion program that was approved last year.

Okamoto said Pakistan needed to recommit to its goals under the package once the crisis abates, including restoring its public finances and governance.

Global economy to drop 3% in 2020, add 5.8% in 2021 — IMF

Global economy to drop 3% in 2020, add 5.8% in 2021 — IMF

The global economy will decline by 3% in 2020 but will show growth by 5.8% in the next year, the International Monetary Fund (IMF) says in its World Economic Outlook released on Tuesday.

"As a result of the pandemic, the global economy is projected to contract sharply by -3% in 2020, much worse than during the 2008-09 financial crisis," IMF says. 

"In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8% in 2021 as economic activity normalizes, helped by policy support," the Fund reports.

At the same time, "there is extreme uncertainty around the global growth forecast. The economic fallout depends on factors that interact in ways that are hard to predict, including the pathway of the pandemic, the intensity and efficacy of containment efforts, the extent of supply disruptions, the repercussions of the dramatic tightening in global financial market conditions, shifts in spending patterns, behavioral changes (such as people avoiding shopping malls and public transportation), confidence effects, and volatile commodity prices," the report reads.

"Many countries face a multi-layered crisis comprising a health shock, domestic economic disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices. Risks of a worse outcome predominate," IMF experts note.

"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago," IMF Economic Counselor Gita Gopinath says in the foreword to the report.
The global economy will decline by 3% in 2020 but will show growth by 5.8% in the next year, the International Monetary Fund (IMF) says in its World Economic Outlook released on Tuesday.

"As a result of the pandemic, the global economy is projected to contract sharply by -3% in 2020, much worse than during the 2008-09 financial crisis," IMF says. 

"In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8% in 2021 as economic activity normalizes, helped by policy support," the Fund reports.

At the same time, "there is extreme uncertainty around the global growth forecast. The economic fallout depends on factors that interact in ways that are hard to predict, including the pathway of the pandemic, the intensity and efficacy of containment efforts, the extent of supply disruptions, the repercussions of the dramatic tightening in global financial market conditions, shifts in spending patterns, behavioral changes (such as people avoiding shopping malls and public transportation), confidence effects, and volatile commodity prices," the report reads.

"Many countries face a multi-layered crisis comprising a health shock, domestic economic disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices. Risks of a worse outcome predominate," IMF experts note.

"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago," IMF Economic Counselor Gita Gopinath says in the foreword to the report.

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