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Friday, 22 January 2021

IMF releases priorities agenda with focus on coronavirus

Egypt has signed two loan deals with the IMF, worth $8 billion, since the COVID-19 outbreak

Doaa A.Moneim , Thursday 14 Jan 2021
IMF
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The International Monetary Fund (IMF) announced on Thursday its key priorities agenda of supporting member countries in their efforts to alleviate the repercussions of the coronavirus.

Kristalina Georgieva, the IMF’s managing director, stated that the agenda is valid through June 2021. It focuses on the activities of critical importance to IMF member countries.

The agenda covers restoring confidence to foster jobs and economic growth, including addressing debt burdens that have been exacerbated due to the pandemic.

Georgieva said the IMF has an ambitious work agenda to reduce debt vulnerabilities, strengthen transparency, and improve the architecture for sovereign debt resolution.

On 8 January, the IMF announced that it maintained its lending capacity at $1 trillion for the coming years, saying that this is of particular importance in the context of increased demand for IMF resources due to the COVID-19 pandemic and ongoing heightened risks.

The agenda includes extending assistance to the most vulnerable countries, chiefly for low-income developing countries, and pushing these countries’ efforts to attain their sustainable development goals amid the ongoing crisis.

The agenda also aims at supporting a transformational recovery for a more sustainable and resilient global economy, including the role that the macroeconomy, monetary policy, taxation, digitalisation and fintech would play in alleviating the impact of the crisis on member countries’ economies.

Moreover, the IMF will continue efforts to ensure that it remains adequately resourced and that governance reform continues alongside internal resource optimisation and business practice modernisation, said Georgieva.

Since the onset of the pandemic, Egypt has engaged with the IMF in two loan deals to address the pandemic and associated challenges, and to keep the gains of the country’s economic reform programme, launched in November 2016 and backed by a $12 billion loan from the IMF as well.

On 11 May, the IMF approved Egypt’s request for emergency financial assistance of $2.7 billion (100 percent of quota) under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment needs arising due to the pandemic.

The sum was immediately disbursed in one tranche.

On 26 June, the fund approved a 12-month stand-by arrangement (SBA) for Egypt with a loan worth $5.2 billion (184.8 percent of quota) disbursed in three tranches through June 2021.

The arrangement is meant to help Egypt cope with challenges posed by the COVID-19 pandemic, meet Egypt’s balance of payment needs, finance the budget deficit, and help the authorities preserve the achievements made over the past four years. It also aims to support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put Egypt on a strong footing for sustained recovery with higher and more inclusive growth and job creation over the medium term.

Egypt received the first tranche of $2 billion in June. It is expected to receive the second tranche, $1.6 billion, this month.  

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