Wealthy countries pledge to provide $11.7 billion for poor countries through the IMF

The International Monetary Fund (IMF) has disclosed that five wealthy countries have pledged to provide $11.7 billion to an IMF loan and grant facility for poor countries.

This is to ensure that the Fund’s steering committee fulfills its vow of reviewing the adequacy of resources needed to fight the coronavirus pandemic.

Managing Director of IMF Kristalina Georgieva said the pledges came from Japan, the United Kingdom, France, Canada, and Australia, representing nearly 70% of the $17 billion increase she asked for on Wednesday.

She added that the firm commitments were made on Thursday, during a morning meeting of the International Monetary and Financial Committee (IMFC), the global crisis lender’s 24-member steering committee, held by videoconference.

She further stated that Germany has made a pledge to another emergency grant facility to provide direct funds for the poorest countries. This will boost the Catastrophe Containment and Relief Trust’s resources to $600 million.

A statement from the IMFC, said: “We remain committed to revisiting the adequacy of quotas and continuing the process of IMF governance reform under the 16th General Review of Quotas, including a new quota formula as a guide, by December 15, 2023.”

The IMFC chairman, South African Reserve Bank Governor Lesetja Kganyago, said at a press conference that the group showed “unprecedented global solidarity,” as rich countries offered resources to the IMF “so that the IMF has got the firepower to deploy to countries that are vulnerable that do not have resources.”

On the Special Rights allocation, Georgieva said there was no consensus for a new one. This is a move that would boost liquidity for all of the Fund’s 189 members.

However, U.S. Treasury Secretary Steven Mnuchin said the United States is against such a move.

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