IMF Govt Board Approves a US$356.5 Million Disbursement to Myanmar to Handle the COVID-19 Pandemic
June 26, 2020
- The IMF Govt Board approves the 72nd request for emergency monetary help to assist its member nations tackle the challenges posed by COVID-19.
- Myanmar’s economic system has been severely impacted by the COVID-19 pandemic. The worldwide shock has led to a pointy decline in exports, remittances and vacationer arrivals. Home exercise has been constrained by the required lockdown measures.
- To handle the pressing balance-of-payments and monetary wants, the IMF has authorised US$ 356.5 million emergency help for Myanmar below the Fast Credit score Facility and the Fast Financing Instrument.
- This can assist the federal government’s COVID-19 Financial Reduction Plan that goals at minimizing the pandemic’s influence by stimulating the economic system and boosting expenditures particularly on well being and social security nets.
Washington, DC –
The Govt Board of the Worldwide Financial Fund (IMF) authorised a
disbursement of SDR 86.1 million (about US$118.eight million or 16.67 %
of quota) below the Fast Credit score Facility (RCF), and a purchase order of SDR
172.three million (about US$ 237.7 million or 33.33 % of quota) below the
Fast Financing Instrument (RFI). This can assist meet the pressing
balance-of-payments and monetary wants arising from the COVID-19 pandemic,
assist the federal government’s plans to spice up spending particularly on well being and
social security nets. The IMF emergency financing may even catalyze
further assist from the worldwide group, together with below the
Debt Service Suspension Initiative (DSSI) supported by the G-20 and the
The COVID-19 pandemic is severely impacting the Myanmar economic system regardless of the
restricted home outbreak to this point. Disruptions have hit laborious households and
companies, together with within the agriculture sector, which contains a fifth of
the economic system and over half of employment. The exterior place is
deteriorating because of the collapse in world demand for clothes and fuel,
weak tourism and remittance inflows and decrease international direct funding.
Home demand has weakened as the required measures to manage a
home outbreak have affected financial actions. As revenues fall and
expenditures rise, the fiscal deficit is rising, placing stress on
funding and public debt.
The authorities have put in place their Covid-19 Financial Reduction Plan that
goals at preserving macroeconomic stability and mitigating the influence of the
pandemic on the inhabitants. Along with rising well being expenditures,
the federal government is increasing meals distribution and money switch applications to
essentially the most weak and supporting companies and farmers throughout all
areas of the nation. The authorities stay dedicated to selling
sturdy and inclusive development whereas bolstering macroeconomic and monetary
sector stability and bettering governance.
The IMF continues to watch Myanmar’s scenario carefully and stands prepared
to offer additional recommendation and assist if wanted. The authorities have
expressed curiosity in exhausting the 100 % of quota annual entry
restrict below the RCF/RFI (about US$ 700 million) and have dedicated to place
in place focused governance, transparency and accountability measures to
guarantee the suitable use of emergency financing. Myanmar has accepted the
obligations of Article VIII of the IMF’s Articles of Settlement, reinforcing
its dedication to sustaining an change system freed from restrictions on
funds for present worldwide transactions.
Following the Govt Board dialogue of Myanmar’s request, Mr.
Mitsuhiro Furusawa, Deputy Managing Director and Performing Chair, made the
The Myanmar economic system is being impacted by the outbreak of COVID-19 via a
sharp decline in tourism and remittances and provide chain disruptions.
Help below the Fast Credit score Facility and Fast Financing Instrument will
assist tackle Myanmar’s pressing financing wants associated to COVID-19 shock,
and catalyze assist from improvement companions, together with with the DSSI.
The authorities stay dedicated to defending essentially the most weak and have
enacted the COVID-19 Financial Reduction Plan (CERP) that includes essential
emergency fiscal, monetary, and financial measures.
Within the close to time period, fiscal spending ought to concentrate on containing the unfold of
the virus, boosting healthcare, and supporting essentially the most weak. It’s
essential that the authorities give precedence to exterior concessional
financing to restrict the dangers related to extreme financial financing.
When situations allow, the main target ought to shift to enhancing income
mobilization and PFM reforms.
The present accommodative financial stance is suitable. Nevertheless, financial
coverage ought to actively handle inflation expectations and a liquidity
squeeze. Higher change charge flexibility will assist cushion in opposition to
exterior shocks. When possible, it’ll even be essential to strengthen
exterior buffers according to the FX intervention rule.
The authorities have introduced insurance policies to assist financial institution lending. It’s
beneficial that forbearance needs to be shortened according to the length
of the COVID-related financial slowdown. The authorities must also monitor
the NPLs and contemplate a complete NPL decision technique. Addressing
gaps within the AML/CFT framework shall be essential going ahead.
The authorities are dedicated to implementing good governance,
transparency, and accountability measures to make sure the suitable use of
this emergency financing. They proceed to have interaction on capability improvement
and technical help with the IMF and different improvement companions to
additional their reforms.
For data on the emergency financing requests authorised by the IMF
Govt Board, please see a hyperlink to the IMF Lending Tracker:
For upcoming discussions on the emergency financing requests, please see a
hyperlink to the calendar of the IMF Govt Board conferences:
IMF Communications Division
PRESS OFFICER: Keiko Utsunomiya
Cellphone: +1 202 623-7100E mail: [email protected]