G20, World Bank, Paris Club agree on debt relief time-bound

Four global multilateral institutions comprising the International Monetary Fund, World Bank, G20 and Paris Club have agreed to a time-bound debt service suspension to poorer countries that request it.

The Managing Director of IMF, Ms. Kristalina Georgieva, disclosed this on Tuesday in a teleconference with members of the Regional Financing Arrangements on steps taken to help poorer countries address the health and economic challenges arising from the coronavirus disease.

She said, “For the first time, the G20 and the Paris Club, supported by the IMF and World Bank, agreed to a time-bound suspension by bilateral official creditors of debt service payments for the poorest of countries that request forbearance.”

Also stressing the need for combined multilateral efforts to face the extraordinary human and economic problems caused by the pandemic, the IMF and the RFAs stated their readiness to join forces to mitigate the impact of COVID-19 on the global economy.

After the teleconference, the leaders stated, “The IMF and the World’s Regional Financing Arrangements stand united in addressing the global challenges related to the coronavirus pandemic and wish to extend our deepest sympathies to all those affected.

“We are following the situation very closely in order to contribute to the decisive actions needed globally to face this exceptional and uncertain circumstances. We are determined to provide the necessary support to mitigate the economic and financial impact of the pandemic, especially on the most vulnerable people and countries.”

Admitting that unprecedented circumstances call for unprecedented actions, they recognised the Fund’s efforts at doubling access to its emergency facilities, approved debt service suspension for 25 low-income countries through a reformed Catastrophe Containment and Relief Trust and the establishment of a new instrument – the Short-Term Liquidity Line – to provide quick-disbursing financing to help strengthen buffers and help with managing liquidity pressures for countries with strong economic policies.

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