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IMF to open USD 1 trillion war chest to aid fight against the coronavirus

HYDERABAD:  More than 90 countries have sought emergency funding from the International Monetary Fund (IMF) to fight the Covid-19 pandemic, according its MD Kristalina Georgieva. The 189-member-nation multilateral agency has indicated that it will put to use its $1 trillion war chest to help countries cope up with the ensuing crisis. Stating that emerging markets and developing economies have been hit hard by Covid-19, Georgieva said that about $90 billion investments have already flowed out of these markets, far more than during the financial crisis. The IMF has begun disbursing funds to requesting countries, including Rwanda, with requests from two additional African nations to be reviewed, she added.

“This is, in my lifetime, humanity’s darkest hour — a big threat to the whole world — and it requires us to stand tall, be united and protect the most vulnerable of our fellow citizens,” Georgieva said in a video interaction with media late Friday. “This is a crisis like no other. We have witnessed the world economy coming to a standstill. We are now in recession. It is way worse than the global financial crisis of 2008- 09,” she said. On Friday, the IMF and the World Health Organisation called for an emergency aid to strengthen health systems, pay doctors and nurses, and buy protective gear.

They urged advanced economies to step up their efforts to help emerging markets and developing countries survive the economic and health impact. Over 1 million have been infected with Covid-19 globally, and more than 53,000 have died as per latest estimates. Even though central banks and finance ministers have taken bold steps to mitigate the effects of the pandemic and stabilise markets, more work is needed to keep liquidity flowing among emerging markets and outside.

To that end, she urged central banks and particularly the US Federal Reserve to continue offering swap lines to emerging economies. Also, the IMF’s board will meet soon to review a proposal to create a short-term liquidity line to help provide funds to countries facing problems. Meanwhile, World Bank President David Malpass in a separate note said that beyond the health impacts from the coronavirus pandemic, they were expecting a major global recession. “We intend to respond forcefully and massively with support programmes, especially for poor countries,” Malpass said, adding that he planned to speak soon with the leaders of Ethiopia, Kenya and other countries.

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