COVID-19: World Bank Group, IMF seek suspension of debt repayments

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By Simeon Ebulu

The World Bank and the International Monetary Fund (IMF) have asked bilateral creditors to suspend debt repayments from International Development Association (IDA) countries that have requested forbearance.

The global financial institutions in a statement yesterday to the G20 concerning debt relief for the poorest countries, said: “This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country.”

They warned that the coronavirus outbreak would  have severe economic and social consequences for IDA  countries. The IDA countries  in the global financial institutions classification, are nations that are home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

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“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries. We will seek endorsement for the Proposal at the Development Committee during the Spring Meetings  in April,” the statement indicated.

It said the World Bank Group and the IMF believe “it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action,”  the WBG and IMF said.