[Full Text] 41st International Monetary and Financial Committee (IMFC) Joint Statement

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[Asia Economy Reporter Jang Sehee] The International Monetary and Financial Committee (IMFC), the top advisory body of the International Monetary Fund (IMF), held a virtual meeting on the 16th and issued a joint statement emphasizing additional measures for global economic recovery and strengthening financial stability.

The IMFC included in the statement its support for the IMF’s assistance to member countries through financial support, policy advice, and capacity development in close cooperation with other international organizations and partner institutions.

The next meeting will be held on October 17 in Washington, D.C.

The following is the full text of the joint statement.

We express our deep condolences for the loss of life caused by the global COVID-19 pandemic. Our urgent common mission is to minimize the health and economic impacts of the COVID-19 pandemic on people worldwide. We are confident that through international cooperation, we will overcome the current challenges to protect a global economy that works for all.

1. We face an unprecedented global crisis. This year, the global economy will contract sharply due to essential health measures to contain the virus spread, disruptions in demand and supply, and tightening financial conditions. Many countries face significant challenges such as limited medical supplies and healthcare capacity. In particular, many emerging and developing countries confront a sharp decline in export demand, plummeting commodity prices, massive capital outflows, foreign currency shortages, and increasing debt burdens.

2. While the global economic outlook is highly uncertain, we expect the economy to recover next year as we continue to mobilize all available means to contain the spread of COVID-19, protect jobs, and restore growth. We have taken unprecedented macroeconomic measures and will further expand necessary fiscal, monetary, and financial stability measures under international cooperation to swiftly return to strong, sustainable, balanced, and inclusive growth. Targeted large-scale fiscal support is crucial to provide safety nets for the most affected households and businesses and to create conditions for a rapid recovery. We welcome central banks’ and financial authorities’ measures to ease globally tightened financial conditions and maintain financial stability.

3. We support the IMF’s assistance to member countries through financial support, policy advice, and capacity development in close cooperation with other international organizations and partner institutions. We welcome the IMF’s crisis response package, which includes enhanced accessibility through streamlined approval procedures for emergency lending facilities and temporary doubling of annual lending limits for the Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF), liquidity provision to member countries with sound economic fundamentals through a new short-term liquidity facility, and debt relief for the poorest and vulnerable countries through the revamped Catastrophe Containment and Relief Trust (CCRT). We call on the IMF to seek additional tools to support member countries based on past crisis response experience as the crisis evolves.

4. We welcome the contributions made so far by member countries to the Catastrophe Containment and Relief Trust (CCRT) and the Poverty Reduction and Growth Trust (PRGT) and call for additional contributions from other member countries to enable the IMF to support the poorest and vulnerable countries. We welcome the coordinated approach agreed between the G20 and the Paris Club, supported by the IMF and the World Bank, for temporary debt service suspension by bilateral official creditors on debt owed by the poorest countries that have requested forbearance. We call on private creditors to participate in these efforts on comparable terms. We welcome the IMF’s focus on crisis-related issues such as debt and financial stability risks while supporting sustainable recovery in a manner consistent with addressing long-standing challenges.

5. We reaffirm our commitment to ensuring that the IMF remains at the center of the global financial safety net, with strong, quota-based, and adequate lending resources. We will closely review the demand for IMF resources. Maintaining the IMF’s lending capacity at around $1 trillion is critical to ensure confidence that the IMF can effectively support member countries in overcoming crises. The recent doubling of the New Arrangements to Borrow (NAB) and the decision to conclude additional bilateral borrowing agreements (BBAs) are important steps in this regard. We look forward to the prompt actions of member countries to implement these decisions. We will revisit quota adequacy by December 15, 2023, and continue to pursue IMF governance reform under the 16th General Review of Quotas based on a new quota formula.

6. We approve the IMF Managing Director’s Global Policy Agenda.

7. The next meeting will be held on October 17, 2020, in Washington, D.C.

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