IMF backs Zimbabwe’s currency reforms
IMF Director of Communications, Gerry Rice, said this in a statement on Friday in Harare.
Rice said that robust economic reforms were required for Zimbabwe to address a deep macroeconomic imbalance challenge, as well as a broader set of social and economic challenges.
He said although the IMF does not have a financing programme with Zimbabwe, it continues to discuss with Zimbabwean authorities to assist in implementing economic reforms that are greatly needed to revive the ailing economy.
Rice said the move by the central bank to abandon the prevailing rate of 1:1 between the U.S. dollar and the surrogate bond note and allow the exchange rate to float was a welcome move to address distortions that have impacted on the economy.
“The currency reforms’ success will depend on the implementation of an effective overall monetary policy framework supported by market-determined interest and exchange rates, together with prudent fiscal policies,” Rice said.
The Reserve Bank of Zimbabwe two weeks ago introduced the foreign exchange inter-bank market where the local currency, encompassing the Real Time Gross Settlement balances, bond notes and coins will now be traded with the U.S. dollar and other currencies at market rates.
The central bank pegged the opening rate at 2.50 against the U.S. dollar, slightly lower than black market rates of 3.60.
Rice said the IMF would maintain engagement with the struggling southern African country to offer support.
COVID-19 worsens pre-existing financial vulnerabilities: IMF
The International Monetary Fund (IMF) said Friday that pandemic-triggered economic crisis is “exposing and worsening financial vulnerabilities” that have built up during the past decade, warning of more instability and a new financial crisis.
After a decade of “extremely low rates and volatility,” there are three potential weak spots in the global financial system: risky segments in global credit markets, emerging markets, and banks, two IMF officials wrote in a blog.
“Should the ongoing economic contraction last longer or be deeper than currently expected, the resulting tightening of financial conditions may be amplified by these vulnerabilities, causing more instability or even a financial crisis,” the officials said.
The blog, part of a special IMF series on the response to the COVID-19 pandemic, was authored by Tobias Adrian, financial counsellor and director of the IMF’s Monetary and Capital Markets Department, and Fabio Natalucci, deputy director of department.
Noting that risky segments of credit markets have expanded rapidly since the global financial crisis, they said potential fragilities include borrowers’ weaker credit quality, looser underwriting standards, liquidity risks at investment funds, and increased interconnectedness.
Policymakers should act decisively to contain COVID-19‘s fallout and support the flow of credit to firms, the IMF officials said, urging regulators to encourage asset managers to be prudent and use all available liquidity management tools to address risks.
“Once the crisis is over, a comprehensive assessment of the sources of market dislocations and underlying vulnerabilities it unmasked should be conducted,” they said, highlighting that policymakers should consider whether including nonbanks in the regulatory and supervisory perimeter is warranted, given their expanded role in risky credit markets.
On emerging markets, the IMF officials noted that they saw capital outflows of over 100 billion U.S. dollars since the beginning of the pandemic, nearly twice as big (relative to GDP) as those experienced during the global financial crisis.
Noting that the prolonged period of low interest rates encouraged both borrowers and creditors to take more risks, they said the resulting surge of portfolio inflows into riskier asset markets contributed to the buildup of debt and in some cases resulted in stretched valuations in emerging and frontier markets.
The IMF officials said emerging markets should manage external pressures by allowing their exchange rate to depreciate. “If exchange-rate movements become disorderly, authorities should consider intervening in foreign exchange markets,” they said.
They also suggested temporary capital flow management measures may have to be used in the face of substantial outflows.
On banks, the officials said profitability has been a persistent challenge for banks in several advanced economies since the global financial crisis, noting that extremely low interest rates have compressed banks‘ net interest margins.
A simulation exercise conducted for a group of nine advanced economies indicates that a large fraction of their banks, by assets, may fail to generate profits above their cost of equity in 2025, according to the blog.
Various strategies to preserve and strengthen capital should be considered, including restricting dividend payouts and share buybacks, they continued, echoing recent remarks by IMF Managing Director Kristalina Georgieva, who urged halting bank dividends and buybacks in light of the COVID-19-induced economic contraction.
In the coming years, authorities will need to take on some of the structural challenges banks face, the two IMF officials said. For example, financial sector authorities should incorporate the potential impact of low interest rates in their decisions and risk assessments.
Ukraine, IMF agree on 5-bln-USD aid program to battle COVID-19
Ukraine and the International Monetary Fund (IMF) have reached an agreement on a new 5-billion-U.S.-dollar aid program to help the country cope with impacts of COVID-19 pandemic, the Interfax-Ukraine News Agency reported Friday.
The deal was based on the so-called Stand-By Arrangement, an economic program of the IMF involving financial aid to help countries in need during an economic crisis.
The program will ensure Ukraine’s ability to continue moving along the growth path and resume wider reforms when the crisis ends, said Ivanna Vladkova Hollar, mission chief for the Ukraine IMF office.
Kiev expects to receive the first funds before the end of this month or in early June.
IMF says China’s experience in combating COVID-19 offers valuable lessons
China was the first to take very strong actions and is the first to be exiting the COVID-19 crisis, so there are a lot of valuable lessons to be learned from China‘s experience, the International Monetary Fund (IMF) said Thursday.
“What they’ve done broadly on the monetary and the fiscal front, of course, which many other countries have taken strong measures in those areas, the way that China is letting the economy adjust to these new and difficult circumstances, which, again, is something all countries need to do,” Rice said.
The IMF spokesperson said that China is moving ahead in some areas, which can carry lessons for others. “For example, in electronic payment systems, e-commerce, linking very small firms to markets and consumers,” he said.
“I think China‘s experience is very important to look at, as this global crisis evolves,” Rice said.
He also said that China has an important role to play in helping the world and the poorer countries, in particular, noting that China has pledged to support the Group of Twenty Debt Relief Initiative for low-income countries.
The IMF spokesperson welcomed China and a number of other countries’ “very generous contribution” to the Catastrophe Containment and Relief Trust (CCRT), which can provide some debt relief to the IMF’s poorest member countries.
Rice said under the revamped CCRT, 27 countries have so far received immediate relief on their payment obligations to the multilateral lender. “We’re looking to triple that debt relief from the IMF,” he said.
At the press briefing, the spokesperson also noted that the IMF has received emergency financing requests from 102 countries, of which 59 had been approved as of Wednesday.
IMF chief urges halting of bank dividends, buybacks amid COVID-19 pandemic
International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday urged the halting of bank dividends and buybacks in light of the COVID-19 induced economic contraction, noting that such actions could help reinforce bank buffers.
In an opinion piece published on the Financial Times, the IMF chief said even though the resilience of the financial system has been significantly strengthened after the 2008 financial crisis, as the world braces for a deep recession this year, “this resilience will be tested.”
“Having in place strong capital and liquidity positions to support fresh credit will be essential. One of the steps needed to reinforce bank buffers is retaining earnings from ongoing operations. These are not insignificant,” Georgieva said.
According to IMF calculation, the 30 global systemically important banks distributed about 250 billion U.S. dollars in dividends and share buybacks last year. “This year they should retain earnings to build capital in the system,” she said.
Noting that the interests of bank shareholders are aligned with those of bank supervisors and customers, Georgieva said all stakeholders will also ultimately benefit if banks preserve capital instead of paying out to shareholders during the pandemic.
The breakdown looks like this: direct budget support is currently estimated at 4.4 trillion dollars globally, and additional public sector loans and equity injections, guarantees, and other quasi-fiscal operations amount to another 4.6 trillion, the blog said.
Central banks, meanwhile, have also provided extraordinary liquidity support to a wide range of markets.
“The public sector is doing what it can to help prevent another banking crisis from happening again. Shareholders have both an interest and an obligation to do the same,” Georgieva said.
The IMF chief pointed out that in some countries, banks have voluntarily decided to collectively suspend shareholder payouts and buybacks, and in others, authorities have had to push.
“The need to preserve capital is already being recognized and needs to be so more widely,” she said. “Collective decisions are vital.”
French ambassador urges Lebanon to accelerate talks with IMF
French Ambassador to Lebanon Bruno Foucher on Monday urged Lebanese officials to accelerate talks with the International Monetary Fund (IMF) to be able to unlock CEDRE funds, LBCI local TV channel reported.
“Talks with the IMF and the economic strategy adopted by the cabinet are two very important steps to be able to receive funds from CEDRE,” Foucher said, following a meeting held with Lebanese Prime Minister Hassan Diab at the Grand Serail to discuss latest economic developments.
Foucher noted that the coming days will constitute a very important period to continue talks with the IMF and reach positive results with regard to Lebanon’s economic strategy and necessary reforms.
Meanwhile, Diab said his cabinet is working hard to implement reforms requested by CEDRE and the international community in a bid to restore confidence in Lebanon.
“We will be working in this direction and I am sure we will be able to restore prosperity to our economy,” Diab said.
CEDRE refers to the Conference for Economic Development and Reform through Enterprises, hosted by France in 2018, to help Lebanon raise funds to finance its plan to modernize infrastructure and develop economy.
Lebanon has pledged during CEDRE conference to adopt certain reform measures in a bid to unlock 11 billion U.S. dollars in loans and donations to support its ailing economy.
However, the previous government was incapable of taking measures to implement serious reforms.
The current government is holding talks with the IMF to discuss its economic plan and receive financial and technical support from the fund.
IMF approves 520 mln USD to help Jamaica address COVID-19 impact
The International Monetary Fund (IMF) on Friday approved Jamaica’s request for emergency financial assistance of about 520 million U.S. dollars to help meet the urgent balance-of-payments needs stemming from the COVID-19 pandemic.
“Despite the authorities’ best efforts, the pandemic is severely impacting the Jamaican economy, as a sudden stop in tourism and falling remittances are generating a sizable balance-of-payments need,” Zhang Tao, deputy managing director of the IMF, said in a statement, adding the economic outlook remains subject to “an unusually high degree of uncertainty”.
The disbursement under the IMF’s Rapid Financing Instrument (RFI) will strengthen Jamaican reserves and help catalyze additional support from other international financial institutions and development partners, Zhang noted.
“Once the crisis abates, building on their demonstrated commitment to reform and stability-oriented measures, the authorities should continue the implementation of their ambitious reform agenda to support the economic recovery and ensure strong and sustainable economic growth,” he said.
The Government of Jamaica has declared the entire island as a disaster area and established a special taskforce to coordinate the country’s COVID-19 response and recovery efforts, according to the IMF.
Uganda’s reserves will decline sharply without external help – IMF
Without external help, Uganda’s foreign exchange reserves will fall to under two months of import cover in 2020/21 and leave the country in a vulnerable position, the International Monetary Fund said in a statement issued on Friday.
“Absent external support, the expected deterioration in the current, capital and financial accounts would result in a sharp decline of the Bank of Uganda’s (BoU) reserve buffer,” the IMF said.
“This would be below the adequate level of reserves for Uganda, and would leave the country in a vulnerable position,” it added.
Edited By: Emmanuel Okara/Ephraims Sheyin (NAN)
Ukrainian parliament passes banking law for IMF loans
The Ukrainian parliament has passed a law on preventing the return of nationalized or liquidated commercial banks to their former owners, meeting the last requirement to get 5.5 billion U.S. dollars in loans from the International Monetary Fund (IMF).
The adoption of the law on Wednesday was hailed by Ambassador of the European Union (EU) to Ukraine Matti Maasikas as “a vital measure to protect public finances and Ukrainian taxpayers.”
It is vital “for economic stability, fairness, rule of law, continuing IMF and EU financial assistance,” Maasikas said on Twitter.
In December 2019, the Ukrainian president, the government, and the National Bank of Ukraine agreed with the IMF to open a three-year financing program, which amounts to 5.5 billion U.S. dollars.
The final decision has to be made by the Fund’s management and board of directors after Kiev meets all requirements, including the adoption of several laws.
In late March, the Ukrainian parliament voted to lift a ban on sales of farmland to meet one of the requirements needed to unlock the IMF loan program.
Lebanon starts official talks with IMF over financial strategy
Lebanon has started on Wednesday official talks with the International Monetary Fund (IMF) to discuss a strategy drafted by the government to save the country from financial collapse and restructure its debt.
“The Lebanese government and the IMF have completed the first stage of talks with the aim of reaching an agreement that will put the Lebanese economy on the right track,” Finance Minister Ghazi Wazne was quoted as saying in a statement released by the Finance Ministry.
Wazne said he is relieved about talks with the IMF and he expects future discussions to be as successful as the first ones.
Lebanon has defaulted on its debt earlier this year and sent an official request to the IMF for financial support.
The government is expected to implement a wide range of reforms to be able to unlock funds by the IMF and other donor parties.
Lebanon’s public debt has reached an alarming level of more than 92 billion U.S. dollars.
IMF to recommend approval of 23.8 bln USD FCL for Chile
The International Monetary Fund (IMF) on Tuesday said its managing director plans to approve Chile’s request for a 23.8 billion U.S. dollars Flexible Credit Line (FCL).
“IMF Managing Director Kristalina Georgieva intends to recommend approval of the FCL arrangement for Chile when the IMF Executive Board meets again to take a decision in the following weeks,” the IMF said in a press release.
The IMF executive board discussed Chile’s request for “a two-year arrangement” under the FLC with the IMF during an informal session on Tuesday, the release said.
“The Chilean authorities intend to treat the credit line as precautionary,” it added.
IMF approves 2.772 bln USD in emergency support to Egypt to address COVID-19 pandemic
The Executive Board of the International Monetary Fund (IMF) approved on Monday Egypt’s request for emergency financial assistance of 2.772 billion U.S. dollars over the COVID-19 outbreak.
Prior to the COVID-19 shock, Egypt carried out a successful economic reform supported by the IMF’s Extended Fund Facility to correct large external and domestic imbalances, according to an IMF statement.
The RFI will help alleviate some of Egypt’s most pressing financing needs, including those for spending on health, social protection, and supporting the most impacted sectors and vulnerable groups, the IMF said.
Egypt announced in late April that it had asked the IMF for financial support to help deal with the coronavirus crisis.
In mid-March, Egyptian President Abdel-Fattah al-Sisi allocated 100 billion Egyptian pounds (6.35 billion U.S. dollars) to finance an anti-coronavirus plan.
IMF approves $2.7 bn in aid for Egypt
The International Monetary Fund (IMF) said it would give Egypt 2.77 billion dollars in aid to help it “meet the urgent balance of payments” requirements that the country is facing as a result of the coronavirus.
“The pandemic and global shock pose an immediate and severe economic disruption that could negatively impact Egypt’s hard-won macroeconomic stability if not addressed,” the Washington-based institution said.
The aid will help Egypt limit the decline in its foreign currency reserves and provide financing to the budget for “targeted and temporary spending.”
Egypt has so far reported a total of 9,746 infections of coronavirus, including 533 deaths.
Prime Minister Mostafa Madbouly said at the time the IMF loan would be a “proactive step” against potential repercussions on Egypt’s economy due to the virus and was aimed at preserving the gains made during economic reforms in recent years.
Egypt in 2016 secured a 12-billion-dollar, three-year IMF loan to help the Egyptian government implement economic reforms that saw tough austerity measures imposed in order to help the country stabilize its finances.
In 2019, Egypt received the last tranche of the IMF loan.
The IMF has stepped up its assistance and lending programmes since the COVID-19 pandemic broke out, to help nations struggling as the global economy enters a downturn amid lockdowns in countries around the world to stem the virus’ spread.
Edited By: Isaac Aregbesola (NAN)
Lebanon has to accept IMF’s tough conditions in return for financial support: president
Lebanese President Michel Aoun said on Friday that his country will have to accept tough conditions from the International Monetary Fund (IMF) to get out of its deteriorating financial situation, a local media outlet reported.
“We may have to accept tough conditions suggested by the IMF in return for its financial support, which falls in the interest of the our country by encouraging us to make brave decisions,” Aoun was quoted as saying by Elnashra, a local independent newspaper.
The president also said he will discuss with the IMF the losses Lebanon has to suffer for hosting a big number of Syrian refugees.
“The cost of hosting refugees reached 25 billion U.S. dollars until 2018,” he said, adding the closure of Syrian borders has caused Lebanon a total of 43 billion dollars in losses.
Lebanon has submitted an official request to the IMF for funds for restructuring its public debt and implementing necessary reforms in the country.
Lebanon hopes for IMF aid after passing crisis plan
Lebanon hopes to secure IMF aid based on a financial reform plan approved by the government to help the country through an acute economic crisis that could last up to five years, Prime Minister Hassan Diab said on Thursday.
The financial crisis is seen as the biggest threat to Lebanon’s stability since the 1975 to 1990 civil war.
Mounting hardship is fuelling a new wave of unrest with a protester killed during rioting in Tripoli this week.
“We will use this plan to apply for an IMF programme in light of which there will be negotiations.
“If we get IMF support and God willing we will, it will help us to pass through this difficult economic phase which could be three, four or five years,” he said.
“The amount the IMF will give is up to negotiations,’’ Diab told newsmen after a cabinet session
The IMF is widely seen as Lebanon’s only way to secure desperately-needed financing.
Foreign governments that have supported Lebanon in the past have said it must implement long-delayed reforms before it gets any support this time.
The crisis is rooted in decades of state waste, corruption and bad governance that landed Lebanon with one of the world’s biggest public debt burdens.
Lebanon defaulted on its sovereign debt in March for the first time.
Its currency has shed over half its value and savers have been largely shut out of their deposits since October, when countrywide protests erupted against ruling politicians.
Consumer goods prices in the import-dependent country have shot up by 50 per cent since then.
However, the finalised reform plan was not immediately available.
Diab said the plan would also be used to launch negotiations via its financial adviser Lazard to restructure the sovereign debt.
“It would take six to nine months to be clear how much 31 billion dollars of Eurobonds could be reduced,’’ he said.
An official source said the plan did not deal with the value of the Lebanese pound, still pegged at a rate of 1,507.5 to the dollar, even as it has slumped below 4,000 on a parallel market.
Diab said the exchange rate was a matter for the central bank not the government.
He also said the plan did not require approval by parliament.
Drafts of the plan have set out vast losses in the financial system, including projections of tens of billions of dollars of losses at the central bank and in the banking system.
Edited By: Abiodun Oluleye/Silas Nwoha (NAN)
Egypt’s request for new IMF package not to affect daily life: PM
Egypt’s Prime Minister Mostafa Madbouly said on Wednesday that the government’s request to the International Monetary Fund (IMF) for a new financial package will not affect the citizens’ daily lives.
“Egypt has asked the IMF for financial support on Sunday to help it deal with the coronavirus crisis and will begin talks with it within days,” Madbouly said, according to a cabinet statement.
He reiterated that comprehensive package of financial support “would help strengthen confidence in the Egyptian economy, make further progress to protect the most vulnerable and provide the basis for a strong economic recovery.”
He stressed that “the request is only related to structural reforms to maintain gains and achievements made by the national economy.”
The financial support request raised people’s worries since a previous IMF loan necessitated the government to take some measures such as subsidy cut and float of currency.
“The one-year financial support request is part of the country’s precautionary measures to promote its capabilities to challenge the COVID-19 deteriorations,” Waleed Gaballah, professor of financial and economic jurisdictions at Cairo University told Xinhua.
He said the move will contribute to reviving the economy faster and preserve the economic reform’s gains that were affected by the virus outbreak.
The expert explained Egypt has benefited from the economic reforms, started in 2016, and enjoys enough financial management experience that qualified the North African country to stand against further economic shocks.
Gaballah expected that Egypt would seek around 3 to 4 billion U.S. dollars from the IMF.
Experts want FG to use IMF loan for the purpose intended
Some financial experts have urged the federal government to use the loan approved by IMF for the purpose intended so as to help sustain the country’s economy.
The experts, Mr Phil Aragbada and Mr Sola Famakinwa, disclosed this in separate interviews with the News Agency of Nigeria , in Ibadan on Wednesday.
Aragbada, an ex-banker, said that the government’s move was in the right direction as “it is when people are alive that they can be productive, so sustaining lives is crucial at this time.”
He said the pandemic had caused serious economic problems for Nigeria, particularly with the slump in global oil prices.
Aragbada said it was imperative for states to have their share of the money as indicated by the national assembly as most states were in financial difficulties at this time.
“We just have to prepare for the worst and expect the best because the normal economic theories cannot actually work at this time.
“Ordinarily, when the government takes a loan, it is expected to be used for productive fiscal measures that will accrue lots of revenue.
“But as things stand now, what we are just doing is to save human lives as being done in other climes, though we cannot compare ourselves to the United States of America,” Aragbada said.
The former General Manager, Corporate Affairs, Skye Bank and a former editor at the defunct Sketch newspaper, said it was important for money to be in circulation, adding that keeping consumption going would aid productivity.
“The only danger is that we operate a mono-product economy. The price of oil in the global market had collapsed.
“The cost of selling oil now is far lower than the cost of producing it. The implication of that is that it is a negative revenue to Nigeria.
“So, we need the loan, but it should be used to finance what it is intended for,” he said.
Also, Famakinwa, a Micro-concept, Finance and Management consultant said that the fund was not meant for economic development, but emergency fund to tackle COVID-19 in Nigeria.
“My fear is that the fund should be used for its purpose and not diverted to finance other things.
“The 3.4 billion dollars IMF loan will attract 1.05 per cent interest payable within four years. This action will increase our external debts, Nigeria will have to service more debts.
“With the price of crude oil having dropped drastically, Nigeria will have to expand its tax net.
“More debts will make the economy get worse, while the naira will be devalued, this will affect many businesses in Nigeria,” he said.
He said that if productivity was boosted as well as the manufacturing sector aided, the country would survive the effect of COVID-19 on its own in the shortest possible time.
Edited By: Abiodun Esan/Tajudeen Atitebi (NAN)
IMF, WTO urge open trade amid COVID-19 pandemic
The International Monetary Fund (IMF) and the World Trade Organization (WTO) on Friday urged countries to refrain from imposing export and other trade restrictions as the world fights against the COVID-19 pandemic.
“We are concerned by supply disruptions from the growing use of export restrictions and other actions that limit trade of key medical supplies and food,” the IMF and the WTO said in a joint statement, warning export restrictions can be “dangerously counterproductive” if taken collectively.
“Such measures disrupt supply chains, depress production, and misdirect scarce, critical products and workers away from where they are most needed,” the two international institutions said, adding the result is to “prolong and exacerbate the health and economic crisis,” with the most serious effects likely on the poorer and more vulnerable countries.
In addition to restrictions on medical goods, curbs on some food items are starting to appear, despite strong supply, they noted, calling for more attention to the role of open trade policies in defeating the virus, restoring jobs and reinvigorating economic growth.
“We call on governments to refrain from imposing or intensifying export and other trade restrictions and to work to promptly remove those put in place since the start of the year,” they said, adding the WTO and the G20 offer two forums for global policy coordination on these important matters.
Citing the experience in the global financial crisis, they said global economic leaders in 2008 jointly committed to refraining for a year from new import, export and investment restrictions, which helped to avoid widespread trade restrictions that would have worsened the crisis and delayed recovery.
“History has taught us that keeping markets open helps everyone — especially the world‘s poorest people. Let’s act on the lessons we have learned,” they said.
The joint statement came after the IMF said last week that the global economy is on track to contract sharply by 3 percent in 2020 as a result of the COVID-19 pandemic, the worst recession since the Great Depression in the 1930s.
IMF approves 28.9 mln USD to Maldives as COVID-19 cases rise
The International Monetary Fund (IMF) approved a disbursement of 28.9 million U.S. dollars to the Maldives on Thursday as the number of COVID-19 cases in the country continued to rise, local media reported.
The Executive Board of the IMF approved the disbursement under the Rapid Credit Facility (RCF), which the government can use to manage fiscal needs and balance of payments amid a worsening COVID-19 outbreak.
“The authorities will reprioritize and cut capital expenditures, redirecting funds as needed to combat the pandemic and provide temporary and well-targeted support to the most vulnerable households and businesses,” Tao Zhang, deputy managing director of IMF said in a statement.
On Wednesday, Finance Minister Ibrahim Ameer said the country needed an immediate infusion of 27 million U.S. dollars to cover state expenses, requesting MPs to vote for a temporary stay on fiscal responsibility laws in order to enable greater borrowing from the central bank.
Meanwhile, four Maldivian citizens and five Bangladeshi nationals tested positive for COVID-19 on Thursday and were transferred to an isolation facility, raising the country’s case count to 94, according to the Ministry of Health.
Confirmed COVID-19 cases in Maldives have more than doubled since clusters of community transmission were discovered in capital Male last week.
The city has been placed under a two-week lockdown with travel between islands limited to the transport of essential supplies.
IMF, regional financing arrangements pledge cooperation to mitigate pandemic’s impact on economy
“The IMF and the world‘s Regional Financing Arrangements stand united in addressing the global challenges” related to the pandemic, IMF Managing Director Kristalina Georgieva and heads from the European Stability Mechanism, Eurasian Fund for Stabilization and Development, Latin American Reserve Fund, Arab Monetary Fund and ASEAN+3 Macroeconomic Research Office said in a joint statement after holding a teleconference.
The officials emphasized that the most effective way to support the global economy is a comprehensive response and mobilization of the resources and expertise available at all layers of the Global Financial Safety Net (GFSN).
“Against this backdrop and leveraging the deep ties created among our institutions during the past years, the IMF, at the center of the GFSN, and the RFAs, emphasize their readiness to cooperate to mitigate the impact of the pandemic on the global economy and contribute to its recovery,” they said, adding they remain strongly committed to working together closely to exchange information on the needs of their members.
“Where appropriate and feasible, we will cooperate to facilitate co-financing operations to address our members’ needs and stand ready to provide technical assistance and policy advice,” they said.
The statement came after the IMF said last week that the global economy is on track to contract sharply by three percent in 2020 as a result of the COVID-19 pandemic, the worst recession since the Great Depression in the 1930s.
Economic stimulus: Osinbajo holds virtual meeting with IMF, World Bank reps
Vice President Yemi Osinbajo on Tuesday in Abuja held an online meeting with representatives of the International Monetary Fund(IMF) and the World Bank.
The meeting, anchored via videoconferencing from the Presidential Villa, deliberated on how the agencies could collaborate with Nigeria in the planned additional economic stimulus packages to address the fallout of COVID-19 pandemic.
President Muhammadu Buhari on March 30, set up the Economic Sustainability Committee(ESC) headed by the vice president to develop a clear economic sustainability plan until 2023.
The committee was tasked with identifying fiscal and monetary measures to enhance oil and non-oil revenues in order to fund the plan; develop a stimulus package and come up with measures to create more jobs while keeping existing ones.
Buhari had also approved an initial economic stimulus package of N500 billion.
The global economy is expected to go into recession in 2020 while the IMF has predicted that Nigeria will go into recession to a level of negative 3.4 per cent.
The ESC had expressed optimism that with the plans it had drawn, Nigeria would be able to return to positive growth by 2021.
Edited By: Sadiya Hamza (NAN)