- The International Monetary Fund is ready to tap its $US1 trillion lending capacity as the coronavirus spreads.
- It’s the latest sign of concern that the epidemic could plunge the global economy toward a downturn.
- “The case for a coordinated and synchronised global fiscal stimulus is becoming stronger by the hour,” IMF Managing Director Kristalina Georgieva said.
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The International Monetary Fund is ready to tap its $US1 trillion lending capacity as the coronavirus spreads, the latest sign of concern that the epidemic could push the global economy toward a downturn.
IMF Managing Director Kristalina Georgieva said Monday the international lender stood ready to provide aid to its 189 member nations and encouraged governments and central banks to deploy their own stimulus measures.
In an effort to contain the respiratory illness COVID-19, government and health officials have placed increasingly stringent restrictions on commerce and travel.
“While quarantining and social distancing is the right prescription to combat COVID-19’s public health impact, the exact opposite is needed when it comes to securing the global economy,” Georgieva said. “The case for a coordinated and synchronised global fiscal stimulus is becoming stronger by the hour.”
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The international lender has 40 ongoing arrangements with combined commitments of about $US200 billion and has received interest from about 20 more countries, according to Georgieva. About $US50 billion is available for emerging and developing economies, while low-income members will have access to up to $US10 billion in concessional financing facilities that carry zero interest rates.
“As a first line of defence, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit to help countries with urgent balance-of-payment needs,” she said.
Policymakers around the globe have raced to respond to the human and economic threats of COVID-19, which has spread to at least 143 countries and sickened more than 153,500.
In the US, the Federal Reserve on Sunday made a second emergency rate cut and rolled out a $US700 billion quantitative easing program. The Senate is expected to pass on Monday a second funding package designed to soften the economic blows of COVID-19, such as through the expansion of paid sick leave and free testing for the illness.
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