Macro Analysis / Global

IMF emergency financing tracker: Disbursements agreed for Uzbekistan and Jamaica

  • Disbursements under emergency facilities now reach 53 countries for a total of US$21bn
  • IMF completes programme reviews for Armenia and Benin
  • IMF staff conclude discussions on a new RFI for Mongolia

Our updated tracker* captures 72 countries that we know of so far that have either sought, or are seeking, emergency help from the IMF or have made drawings under their existing arrangements, or are seeking new ones, in response to the Covid-19 pandemic (this is up by 1 since our last update). We note that our count of 72 includes three countries that now have two entries. 

There have been five events since our last update on 15 May, although we record only a new one in our tracker as we had anticipated four of them the last time. There have been four Board approvals, two emergency financing facilities (Uzbekistan and Jamaica) and two programme reviews (the second review of Armenia's SBA and the sixth and final review of Benin's ECF), although we knew all of these were coming from the IMF board schedule. The one new event concerns Mongolia, where IMF staff noted that they had concluded discussions with the authorities on a RFI on 18 May. Board approval is expected in early June. 

Since our last update on 15 May, the two latest approvals for emergency financing facilities takes the total number of countries now to 53 on our count, and the total amount disbursed under these facilities to US$20.9bn. According to the IMF board schedule, there should be two more approvals today (Jordan and St Vincent), as we flagged last week. 

Over half of the Fund's 189 members have requested emergency help since the start of the coronavirus pandemic (54%). See the full report for the complete list of 72 countries covered in our tracker. 

*Our updated tracker seeks to identify countries that have requested IMF financial support, under its different guises, in order to help them deal with the impact of Covid-19. We do not claim it is exhaustive, but hope it provides a useful guide to investors on the current state of play. It is based on information that has been reported by the IMF itself, various media or national governments. We aim to produce regular updates.


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Macro Analysis / Global

IMF emergency financing tracker: RFI for Egypt, programme switch for Ukraine

  • Disbursements under emergency facilities now reach 51 countries for a total of US$20bn
  • IMF approves RFI for Egypt and switches programme focus in Ukraine
  • Peru and Chile submit requests for new precautionary credit lines
Stuart Culverhouse @
Tellimer Research
15 May 2020

Our updated tracker* captures 71 countries that we know of so far that have either sought, or are seeking, emergency help from the IMF or have made drawings under their existing arrangements, or are seeking new ones, in response to the Covid-19 pandemic (this is up by 6 since our last update). We note that our count of 71 includes three countries that now have two entries. 

Since our last update on Thursday 7 May, we identify 4 countries that have had emergency financing facilities approved, taking the total number of countries now to 51, and the total amount disbursed under these facilities to US$20bn. The latest approvals include Egypt and Seychelles, and a second emergency disbursement for Kyrgyz Republic (the first country to have had two separate requests approved). We had, however, already anticipated three of these approvals over the last week in our previous overall count (we knew they were coming from the board schedule). In addition, we observe four new requests pending from Jamaica, Jordan, St Vincent, and Uzbekistan on the board schedule in coming days. 

Also this week, Peru and Chile have submitted requests for new precautionary credit lines (amounting to US$11bn and US$23.8bn, respectively) and Honduras reached staff-level agreement on the second review of its joint SBA/SCF, with augmented access. 

Board reviews are scheduled in coming days for existing arrangements for Benin (sixth review of the ECF) and Armenia (second review of SBA), although we had already anticipated them in our overall count after their staff-level agreements were announced. 

The IMF confirmed last week a change in the nature of programme discussions for Ukraine. The IMF said at its regular press briefing on 7 May that the programme discussions had switched from a three-year EFF (on which staff-level agreement was reached in December, pending completion of certain prior actions) to a new shorter 18-month SBA, with less structural conditionality. The size of the new SBA is around US$5bn, according to local reports. The switch in focus has been partly driven by the impact of coronavirus and an urgent financing need. IMF board approval of the new programme could come by the end of this month, at the soonest, after Ukraine's parliament passed the banking law earlier this week. 

Over half of the Fund's 189 members have requested help since the start of the coronavirus pandemic (54%).

See the full report for the complete list of 71 countries. 

*Our updated tracker seeks to identify countries that have requested IMF financial support, under its different guises, in order to help them deal with the impact of Covid-19. We do not claim it is exhaustive, but hope it provides a useful guide to investors on the current state of play. It is based on information that has been reported by the IMF itself, various media or national governments. We aim to produce regular updates.



 
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Macro Analysis / Global

IMF emergency financing tracker: Egypt's SBA up next, but activity is slowing

  • Emergency financing now approved for 71 countries; 65 under emergency disbursements, 6 under existing programme reviews
  • The IMF approved two requests in the last week (Guinea and Montenegro); two more are on the agenda (Myanmar and Egypt)
  • Egypt's SBA, due for Board approval tomorrow, will become the Fund's first proper post-Covid-19 programme
Stuart Culverhouse @
Tellimer Research
25 June 2020

The rate of approvals for emergency financing under the IMF's RCF/RFI facilities, or in the form of programme disbursements, has slowed markedly in the last few weeks. There were just four updates to our tracker in the last week, and we had already anticipated three of them. This slowing is in large part a function of the number of approvals already granted.

In another quiet week, the IMF approved two more requests – Guinea and Montenegro – since our last update on 17 June, taking the total number of countries now to 65 on our count, and the total amount disbursed under these facilities to US$23.9bn. However, we had already anticipated these approvals as they were on the board agenda. Together with the approved programme reviews under their existing arrangements for six countries now (Armenia, Barbados, Benin, Georgia, Honduras and Togo), that takes the total number of countries for which emergency financing has been approved to 71.

According to the IMF board schedule, two more emergency financing requests are due by the end of this week, Myanmar (RCF/RFI) and Egypt (a new SBA, although we knew this was coming following staff-level agreement earlier this month). These will take the total number of countries for which emergency disbursements have been approved to 72 overall (Egypt is already on the list because of its RFI approved in May).

Including requests that are still pending, our updated tracker* captures 83 countries that we know of so far that have either sought, or are seeking, emergency help from the IMF or have made drawings under their existing arrangements, or are seeking new ones, in response to the Covid-19 pandemic (this is up by one since our last update). Note that our count of 83 includes four countries that now have two entries.

Still, despite the apparent slowing in activity, with over half of the Fund's 189 members (54%) having requested emergency help since the start of the coronavirus pandemic – 102 countries according to the IMF press briefing on 21 May – and only 72 approved (by the end of this week), that still implies more to come.

Moreover, we still find it somewhat surprising that Egypt's SBA will become the first proper post-Covid-19 programme approved by the IMF to our knowledge (excluding Ukraine, where a new programme was already on the cards pre-Covid-19, and those countries for which precautionary credit lines have been approved).

See the full report for the complete list of 83 countries covered in our tracker.

*Our updated tracker seeks to identify countries that have requested IMF financial support, under its different guises, in order to help them deal with the impact of Covid-19. We do not claim it is exhaustive, but hope it provides a useful guide to investors on the current state of play. It is based on information that has been reported by the IMF itself, various media or national governments. We aim to produce regular updates.


 
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Sovereign Analysis / Ukraine

Ukraine: IMF staff agreement on new SBA, funding needs still large

  • Board approval on new 18-month SBA amounting to US$5bn expected in coming weeks
  • Agreement will catalyse additional bilateral and multilateral support; but Ukraine will also need to come to market
  • We calculate a public sector financing requirement for this year and identify financing sources
Stuart Culverhouse @
Tellimer Research
22 May 2020

The IMF announced overnight that it had reached staff-level agreement (SLA) on a new programme for Ukraine, an 18-month Standby Arrangement (SBA) amounting to cUS$5bn (180% of quota). Board approval is expected in coming weeks (we suspect by mid-June).

The IMF's announcement is welcome news although widely expected given recent developments in Ukraine (see our Credit Weekly from 14 May). Crucially, the SLA follows the recent passage of the banking law by Ukraine's Parliament (Rada), after which further time was needed to allow for parliamentary procedures ahead of the presidential signature that occurred yesterday, according to reports. Approval of the banking law, which prevents former owners of nationalised or liquidated banks from regaining ownership or receiving state compensation, was seen as the last remaining hurdle to reaching an agreement with the Fund on a new programme.

The IMF had earlier confirmed a change in the nature of programme discussions for Ukraine. The IMF informed at its regular press briefing on 7 May that the programme discussions had switched from a three-year EFF (on which staff-level agreement for a US$5.5bn facility was reached in December, pending completion of certain prior actions) to a new shorter 18-month SBA, with less structural conditionality. The size of the new SBA was reported at around US$5bn, according to local reports. The switch in focus has been partly driven by the impact of coronavirus and an urgent financing need.

But US$5bn isn't US$10bn, is it? Recall that in March, in the early stages of the coronavirus pandemic and global economic crisis, the IMF Managing Director Kristalina Georgieva noted that ongoing discussions involved a bigger programme than previously thought, appearing to confirm local reports that the EFF will be up to US$10bn. Hence, there might be some disappointment with the apparent smaller size of the agreement now, that Ukraine will not receive as much as it wanted. However, we point out that on a pro-rata basis, US$5bn over 18 months is broadly equivalent to US$10bn over 3 years. And, in fact, the SBA is a better deal for Ukraine, being the same amount (pro-rata), with faster disbursements and less conditionality than would be the case under an EFF arrangement. There wouldn't be a need (or time) for many programme reviews in an 18-month programme either. It also seems that this programme agreement has usurped Ukraine's parallel request for emergency IMF financing (RCF/RFI). Still, we think President Zelensky will have to take care in explaining these changes to his domestic audience and why the money is less.

Moreover, the IMF statement yesterday noted that the new SBA is expected to catalyse additional bilateral and multilateral financial support. The government has spoken of around US$10bn in support, including IMF money, with more coming from donors. However, we are not sure all this will arrive at once.

We think the new SBA will allow a maximum disbursement of cUS$3.4bn in 2020 from the IMF, given the Fund's own lending rules (an annual limit of 145% of quota and net of principal repayments). But we think this won't arrive all in one go. We think it might imply two equal disbursements this year, half (US$1.7bn) on programme approval and the other half in a second tranche after completing the first review, presumably before year-end, assuming programme reviews are every six months, unless the Fund agrees to frontloading of course (which might be warranted given the BOP need).

However, even with IMF and donor money, we think the public financing outlook this year is still challenging.

Figure 1: Ukraine 2032 US$ bond – price (%)

Source: Bloomberg, Tellimer Research 

Figure 2: Ukraine 2032 US$ bond – yield (%)

Source: Bloomberg, Tellimer Research 

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Macro Analysis / Global

IMF emergency financing tracker: 30 countries approved so far

  • Over half of the Fund's members have sought emergency help
  • Total amount disbursed under emergency facilities is US$8.6bn
  • Recent approvals include Bolivia, Bosnia, Cote d'Ivoire and Paraguay, while South Africa may be looking to follow
Stuart Culverhouse @
Tellimer Research
24 April 2020

Our updated tracker seeks to identify countries that have requested IMF financial support, under its different guises, in order to help them deal with the impact of Covid-19. We do not claim it is exhaustive, but hope it provides a useful guide to investors on the current state of play. It is based on information that has been reported by the IMF itself, various media or national governments. We aim to produce regular updates.

The IMF Managing Director Kristalina Georgieva said on 15 April in her opening remarks to the IMF/WB Spring Meetings that 102 countries had requested emergency financing from the Fund so far and that the Board will have approved half of these requests by the end of this month. With demand running at 102 countries, that's over half (54%) of the Fund's 189 members. Emergency financing disbursements have now been approved for 30 countries. 

Our tracker captures 46 countries that we know of so far that have either sought, or are seeking, emergency help or have made drawings under their existing arrangements, or are seeking new ones (this is up by 15 from our last update). Since our last update on Friday 17 April, we identify 13 countries that have had emergency financing facilities approved, including Bolivia, Bosnia, Cote d'Ivoire and Paraguay, taking the total number of countries now to 30, and the total amount disbursed under them to US$8.6bn. In addition, Benin reached staff level agreement on the sixth and final review of its existing ECF arrangement, which would also provide US$103.5mn in additional financing. 

Media reports this week also suggest that South Africa had approached the IMF for financial support. We assume this is not for a formal programme, to which there appears to be a lot of domestic resistance, but for emergency financing, presumably under the RFI (100% of quota would amount to a US$4.2bn disbursement). 


 
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Macro Analysis / Global

IMF emergency financing tracker: Half its members have now sought emergency help

  • 17 countries have so far had emergency financing approved
  • Most recent approvals include El Salvador, Panama and Pakistan
  • IMF also introduces a new lending facility, the Short-term Liquidity Line (SLL)
Stuart Culverhouse @
Tellimer Research
17 April 2020

Our updated tracker seeks to identify countries that have requested IMF financial support, under its different guises, in order to help them deal with the impact of Covid-19. We do not claim it is exhaustive, but hope it provides a useful guide to investors on the current state of play. It is based on information that has been reported by the IMF itself, various media or national governments. We aim to produce regular updates.

The IMF Managing Director Kristalina Georgieva said on 15 April in her opening remarks to the IMF/WB Spring Meetings that 102 countries had requested emergency financing from the Fund so far and that the Board will have approved half of these requests by the end of this month. She noted 15 (at that time) had received disbursements already "in a record short time". With demand running at 102 countries, that's over half (54%) of the Fund's 189 members.

Our tracker captures 31 countries that we know of so far that have either sought, or are seeking, emergency help or have made drawings under their existing arrangements, or are seeking new ones (this is up from 25 in our last update). Since our last update on Tuesday 14 April, we identify seven countries that have had emergency financing facilities approved, including El Salvador, Panama and most recently Pakistan (this includes two  Chad and Pakistan  that were already pending), taking the total number of countries now to 17. In addition, the IMF confirmed at its Sub-Saharan Africa press briefing on 15 April that discussions are underway for an RCF for Mozambique and Georgia reached staff level agreement on its existing EFF with augmented access (but this had been flagged before). 

The IMF also announced on 15 April that it had created a new lending facility to strengthen its crisis response. The Short-term Liquidity Line (SLL) is a revolving and renewable backstop for member countries with very strong policies and fundamentals in need of short-term moderate balance of payments support. The SLL will provide revolving access of up to 145% of quota. We're not sure how it will work, but it seems to us to fill a gap between the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL).


 
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