Flash Report /

IMF seeks significantly more resources to help countries fight Covid-19

  • IMF MD Kristalina Georgieva issued a statement following the G20 Leaders' call today

  • Seeks an increase in emergency financing capacity, sizeable SDR allocation and expanded swap facilities

  • Also calls on G20 leaders to support the provision of debt relief for poor countries by official bilateral creditors

IMF seeks significantly more resources to help countries fight Covid-19
Stuart Culverhouse
Stuart Culverhouse

Chief Economist & Head of Fixed Income Research

Tellimer Research
26 March 2020
Published byTellimer Research

IMF Managing Director Kristalina Georgieva issued a statement following the G20 Leaders' extraordinary conference call earlier today. Specifically Georgieva asked G20 Leaders to: 

1. Double the Fund's emergency financing capacity. We assume this means the US$50bn set aside under its existing RFI/RCF emergency facilities that was announced on 4 March. At least half a dozen countries have requested support under these facilities already that we know of (publicly reported). 

2. Boost global liquidity through a sizeable Special Drawing Right (SDR) allocation, as occurred in 2009, and by expanding the use of swap type facilities at the Fund. The SDR allocation will enable the Fund to increase its lending capacity. An SDR allocation was approved in August 2009 during the global financial crisis of SDR161bn (US$250bn) after agreement by G20 leaders; and 

3. Support official bilateral creditors in the provision of debt relief for poor countries. See our report on this earlier today ("Bondholders should follow IMF/WB call for debt relief for poorest countries").

The IMF is seeking significantly more resources to help emerging market economies and low income countries deal with Covid-19, and the associated impact on the global economy, the sudden stop in capital flows and lower commodity prices. 

Georgieva noted that an exceptionally large number of countries simultaneously require IMF emergency financing while many low income countries enter the crisis with a high debt burden. She said on Monday that nearly 80 countries had sought IMF help, although it wasn't clear if this included those with existing programmes and/or those that were already under negotiation.