World Bank and the International Monetary Fund requested official bilateral creditors to provide instant debt relief to the world’s poorest countries as they grapple with severe consequences of the rapidly spreading coronavirus epidemic.
In a mutual statement- the institutions called on official bilateral creditors to instant postpone debt payments from International Development Association (IDA) countries, if requested.
Those nations, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, will be strong hit by the epidemic, they said.
“This will help with IDA countries immediate liquidity required to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing required for each country,” the IMF and the World Bank said.
Almost 76 countries receiving IDA support have gross national income per capita of below $1,175, a threshold that is updated annually.
The World Bank and the IMF said postponing debt payments, consistent with national laws of the creditor countries, would provide “a global sense of relief for developing countries” and send a strong signal to financial markets.
They urged the world`s 20 largest economies (G20) to support their call for action.
The Bank and the IMF invited G20 leaders to assess the crisis impact and financial requirement for each of the IDA countries-including identifying those with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors.
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02 April, 2020