Questions and Answers on Myanmar

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Last Updated: February 25, 2021.
The IMF expressed concern about escalating tensions in Myanmar and emphasized that combatting COVID-19 and supporting the most vulnerable are key immediate priorities.
The IMF noted that recent events could weigh further on the economy by delaying critical reforms and stressed the importance of preserving macroeconomic and financial stability during the period of uncertainty.

On June 26, 2020, the IMF’s Executive Board approved a disbursement of about US$ 356.5 million to Myanmar under the Rapid Financing Instrument / Rapid Credit Facility (RFI/RCF).
On January 13, 2021, the IMF’s Executive Board approved a disbursement of US$ 372.4 million to Myanmar under the RFI/RCF.
Following the January 13 approval, the IMF disbursed USD 372.39 million to the Central Bank of Myanmar on January 28, as scheduled.
The IMF stated that it does not have any further financing forthcoming.

Emergency lending under the RCF/RFI was in response to urgent budgetary financing needs caused by the COVID-19 shock and aimed to quickly support the most vulnerable during a humanitarian crisis.
The IMF emergency financial assistance will support the government’s COVID-19 Economic Relief Plan (CERP) with measures including:
- providing soft loans for businesses;
- credit guarantee schemes to support employment retention among SMEs and high-growth sectors;
- direct cash transfers to vulnerable and at-risk groups and those affected by COVID-19.
The IMF noted that Myanmar faced large economic and social costs as a result of COVID-19; the lending was disbursed to meet these urgent humanitarian needs.

Myanmar meets both the income and market access criteria and therefore qualifies for resources from two IMF facilities:
- the Rapid Credit Facility (RCF) created under the Poverty Reduction and Growth Trust (PRGT); and
- the Rapid Financing Instrument (RFI) created under the General Resource Account (GRA).
Myanmar accesses these two facilities on blended terms, a 1:2 mix of PRGT and GRA resources.
Under the approved access level of 50 percent of quota, this implies:
- 16.7 percent of quota (approximately USD 118.8 million) provided under the RCF; and
- 33.3 percent of quota (approximately USD 237.7 million) provided under the RFI.
The authorities expressed interest in using the full 100 percent of quota annual access limit under the RCF/RFI (about US$ 700 million).
Borrowing terms:
- RCF component: zero interest with 5.5 years grace and 10 years maturity.
- RFI component: rate of interest is the basic rate of charge (which comprises of the market determined SDR interest rate and a margin) with 3.25 years grace and 5 years maturity, plus a service charge of 0.5 basis points at disbursement.
The RCF/RFI comes with no ex-post conditionality; countries receive the full amount for which they are eligible under the RCF/RFI at the time of Board approval, provided they meet all other applicable IMF policies.

As part of the RCF/RFI, the authorities committed to a series of governance measures including:
- a safeguards assessment of the central bank (a diagnostic review of the central bank’s governance, institutional and control framework, similar to assessments done elsewhere; see Staff Report No. 21/23);
- reporting on COVID-19 spending/procurement;
- a targeted audit of COVID-19 related expenditures by the Office of the Auditor General for Myanmar.
The authorities committed to publishing online:
- all quarterly reports on all COVID-19 related expenditures;
- the results of a targeted audit of COVID-19 related expenditures by the Office of the Auditor General for Myanmar;
- information on procurement contracts on COVID-19 related expenditures.
The authorities have worked with IMF Capacity Development experts and other development partners to enhance capacity and improve fiscal reporting, accounting, cash management, and targeting of cash transfers across all regions of the country.
Myanmar is availing of the Debt Service Suspension Initiative (DSSI), supported by the G-20 and Paris Club; the authorities have committed to several of its transparency and reporting requirements.
The IMF stated it is in the best interest of the Myanmar people that these commitments be maintained to help support the people, especially vulnerable groups.