The International Monetary Fund (IMF) has disclosed that it stands ready to offer $10 billion to low-income member states at zero interest rates to help them combat the novel coronavirus (COVID-19).
The Fund said the move could provide about $50bn to emerging and developing economies, while up to $10billion could be made available to the IMF’s low-income members through its concessional financing facilities, which carry zero interest rates.
“The Fund already has 40 ongoing arrangements – both disbursing and precautionary – with combined commitments of about $200bn,” she said. “In many cases, these arrangements can provide another vehicle for the rapid disbursement of crisis financing. We also have received interest from about 20 more countries and will be following up with them in the coming days.”
According to a statement on the IMF website, managing director Krista Lina Georgieva said, this move forms part of efforts to mitigate the effect of the virus on economies.
“As the virus spreads, increased coordinated action will be key to boosting confidence and providing stability to the global economy.”
She argued that, there is a need for a coordinated and synchronized global fiscal stimulus to salvage the unfortunate situation.
“As a first line of defence, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit to help countries with urgent balance-of-payment needs,” Georgieva said.
The Fund’s Catastrophe Containment and Relief Trust (CCRT) can help the poorest countries with immediate debt relief, which will free up vital resources for health spending, containment, and mitigation, Georgieva said.