By Andrea Shalal
WASHINGTON, Apr 7 (Reuters) – The head of the International Monetary Fund said on Wednesday that she will deal with IMF members whether they support offering low- or no-interest financing to middle-income countries hit hard by the pandemic, and not just the worst. poor.
Managing Director Kristalina Georgieva said she is concerned about tourism-dependent and other middle-income countries that have weaker fundamentals and high debt levels even before the pandemic, thus generally supporting the adoption of a broader definition of what makes a nation “vulnerable”.
The IMF’s Poverty Reduction and Growth Facility (PRGT) is currently only able to provide to the poorest nations, limiting the ability of developing countries with lower income levels to seniors get low- or no-interest loans from the Fund.
The United Nations and other institutions have urged the Group of 20 major economies to expand a freeze on official bilateral debt payments and a new common debt treatment framework to include such countries, many of which have suffered a strong impact by the pandemic and its economic effects.
G-20 finance officials on Wednesday endorsed a $ 650 billion expansion of the IMF’s emergency reserves, or Special Drawing Rights (SDRs), so wealthier members of the Fund will be able to lend to the PRGT to help the poorest countries.
Georgieva said that the IMF hopes to finish work on a formal proposal for the allocation of the 650 billion dollars in SDRs by mid-June, and that solutions are also being evaluated for members of the Fund to lend their reserves to help the Poor countries.
He said it is “realistic” that members will be able to access the expanded reserves in mid-August, but he declined to give an estimate on how many SDRs could be shared by the richest countries.
Georgieva said the matter was raised during the G-20 meeting on Wednesday, highlighting a call from Mexico and Argentina for greater debt relief for middle-income countries.
(Edited in Spanish by Carlos Serrano)