IMF "Increasing COVID-19 Burden on Emerging Countries... Over 80 Countries Request Relief Funds"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The International Monetary Fund (IMF) announced on the 1st (local time) that the burden on emerging market economies caused by the COVID-19 pandemic is increasing, and it has received emergency relief fund requests totaling $20 billion (approximately 24.6 trillion KRW) from more than 80 countries.

According to major foreign media, IMF officials said during a conference call with reporters on the same day, "We are seeing the COVID-19 crisis shifting to emerging markets. Infection rates are rising in low-wage countries."

The IMF stated that it is working to identify new funding sources and liquidity for member countries, and that due to significant capital outflows and a sharp drop in commodity prices, some countries have had greater funding needs. Regarding emergency financial support, they said, "Most of the requesting countries are emerging markets and have asked for zero or low-interest loans," adding, "We are working to respond to requests as quickly as possible."

The IMF emphasized that it has a lending capacity of $1 trillion and currently has sufficient resources to meet the support requests from various countries. It also mentioned that, in addition to existing programs, it is reviewing whether to resume a short-term liquidity provision scheme developed several years ago, and if approved by member countries, it will be able to implement it promptly. Regarding the IMF’s Special Drawing Rights (SDR) allocation, it is planned to be made available for use by emerging countries, but it is expected to take some time before implementation.

However, an IMF official pointed out that even under the current circumstances, national debt must remain sustainable. The IMF also explained that requests for debt repayment deferrals by low-income countries do not imply that broader debt relief should be implemented. Previously, on the 25th of last month, the IMF and the World Bank (WB) jointly called on creditor governments to implement debt repayment deferrals to support the poorest countries in overcoming COVID-19 and urged the Group of Twenty (G20) to support this measure.

This content was produced with the assistance of AI translation services.