The International Monetary Fund and the World Bank have asked all bilateral creditors to suspend debt repayment from International Development Association (IDA) countries in order to allow them liquidity for tackling the Coronavirus.
IDA countries are developing countries with low per capita incomes.
“With immediate effect—and consistent with national laws of the creditor countries—the World Bank Group (WBG) and the International Monetary Fund (IMF) call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country,” read the joint IMF, World Bank statement.
“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official creditors to address both the financing and debt relief needs of IDA countries. We will seek endorsement for the proposal at the Development Committee during the Spring Meetings (April 16/17). The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action.”