$1 Trillion to fight the virus

$1 Trillion to fight the virus

The International Monetary Fund (IMF) declared on Monday that it reserved $1 Trillion Dollars of lending capacity to help countries around the world fight against the impact of Coronavirus.

International Monetary Fund director Kristalina Georgieva, called on governments to take additional fiscal stimulus measures and keep in close contact to stop the Coronavirus from causing long-term economic damage. She suggested that coordinated fiscal action on the scale of the 2008-2009 financial crisis may be necessary.

This comes before what is prone to be another bearish market on Wall Street despite central banks efforts to ease monetary policy in order to help countries cope with the fallout of the Coronavirus.

Georgieva said that “The Fund already has 40 ongoing arrangements—both disbursing and precautionary—with combined commitments of about $200 Billion,” and that “there are about 20 more countries interested in support.” The lending can be used to help its members, especially emerging and developing countries. In addition, the Fund’s Catastrophe Containment and Relief Trust “can help the poorest countries with immediate debt relief, which will free up vital resources for health spending, containment, and mitigation”, she wrote.

On the monetary policy front, she said that central banks “should continue to support demand and boost confidence by easing financial conditions and ensuring the flow of credit to the real economy.” She supports the Federal Reserve’s emergency actions that were taken on Sunday.

The Fed declared Sunday that it will start a historic and massive monetary stimulus campaign to help the economic growth. The Central Bank cut the interest rates and launched a $700 Billion easing program to protect the economy from the effects of the virus.



Sources: imf.org, bloomberg.com, cnbc.com, dailysabah.com

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