IMF debt relief for Nepal

The Executive Board of the International Monetary Fund (IMF) has approved the proposal to provide debt relief for 25 countries, including Nepal, in light of the coronavirus pandemic.

In a statement on April 14, Kristalina Georgieva, Managing Director of the IMF, said debt relief for low-income countries would help them cope with the Covid-19 crisis.

Given the severe setback in the global economy, the Bretton Woods twins – the World Bank and the IMF – are meeting virtually in the spring to assess the extent of the losses and prescribe fiscal and monetary stimulus to hard-hit countries.

“Today, I am pleased to say that our Executive Board has approved immediate debt service relief for 25 of the IMF’s member countries under the new version of the Containment and Relief Trust Fund. Disaster Response (CCRT),” Ms Georgieva said in the statement. “This provides grants to our poorest and most vulnerable members to cover their debt obligations to the IMF for an initial phase over the next six months and will help them channel more of their scarce financial resources into life-saving emergency medical assistance and other relief efforts”.

The CCRT can currently provide approximately $500 million in debt service relief in the form of grants, including the recent pledge of $185 million from the UK and $100 million provided by Japan in as immediately available resources. Others, including China and the Netherlands, are also moving forward with significant contributions. The IMF Managing Director has reportedly urged other donors to help the IMF replenish the Trust’s resources and strengthen the fund’s ability to provide debt service relief for two years to its poorest member countries. .

Excluding Nepal, Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, DR, Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen were selected for debt relief.

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