Communiqué of the Forty Second Meeting of the IMFC
IMF News, October 15, 2020
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- Communiqué of the Forty Second Meeting of the IMFC
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- Published: October 15, 2020
Context and opening
- Chaired by Mr. Lesetja Kganyago, Governor of the South African Reserve Bank.
- Date: October 15, 2020.
- Expressed sympathies for loss of human lives caused by the COVID-19 pandemic and commitment to mitigate health and economic impacts worldwide.
Assessment of the global economy and risks
- A tentative global economic recovery is underway, supported by extraordinary macroeconomic policy responses.
- The recovery is partial, uneven, and marked by significant uncertainty, with the pandemic continuing to spread in places.
- Crisis risks and potential long-lasting scars:
- Weaker productivity growth.
- Heavier debt burdens.
- Heightened financial vulnerabilities.
- Higher poverty and inequality.
- Persistence of other longstanding challenges.
Policy stance and commitments
- Sustain extraordinary and agile policy responses, tailored to stages of the crisis and country-specific circumstances.
- Commit to using all available policy tools, individually and collectively, to restore confidence, jobs, and growth.
- Stand ready to assist the most vulnerable countries and people.
- Emphasize international cooperation to accelerate research, development, manufacturing, and distribution of COVID-19 diagnostics, therapeutics and vaccines, aiming for equitable and affordable access for all.
- As the crisis abates:
- Aim for a robust recovery in growth.
- Gradually shift fiscal resources from broad-based to more targeted support.
- Facilitate structural transformation while cushioning impact on jobs, vulnerable people, and viable firms.
- Preserve debt sustainability.
- Monetary policies should remain accommodative, in line with central banks’ mandates.
- Continue to monitor and, as necessary, tackle financial vulnerabilities and risks to financial stability, including with macroprudential policies.
- Reaffirm exchange rate commitments.
Structural agenda and reforms
- Sustain and strengthen efforts to achieve strong, sustainable, balanced, and inclusive growth.
- Advance structural reforms to lift growth, employment, and productivity.
- Support free, fair, and mutually beneficial goods and services trade and investment as engines for growth and job creation.
- Promote investment with high social and economic returns.
- Aim to unlock the potential of the digital economy while addressing related challenges.
- Reaffirm commitment to strong governance, including tackling corruption.
- Maintain a well-functioning international monetary system and enhance international frameworks and cooperation.
- Commit to helping vulnerable countries meet financing needs.
- Continue to enhance debt transparency and sustainable financing practices by debtors and creditors, public and private.
- Support countries’ efforts to maintain debt sustainability or restore it where debt is unsustainable; work with all stakeholders to improve sovereign debt resolution architecture.
IMF role, tools, and work program
- Welcome the Managing Director’s Global Policy Agenda.
- Welcome IMF’s exceptional actions to help members through policy advice, capacity development, and rapid financial support.
- Support IMF efforts to fully utilize and, if needed, further adapt its lending toolkit to help membership address financing needs in the uncertain pandemic environment.
- Support IMF exploration of additional tools drawing on relevant experiences from previous crises.
- Support resumption of focused bilateral surveillance.
- Welcome IMF continued focus on crisis-related issues and support to build a more resilient global economy.
- Support IMF work on macro-critical issues consistent with its mandate, including:
- Macroeconomic implications and policies related to social spending.
- Governance.
- Climate change.
- Fintech.
- Digitalization.
- Support IMF enhanced assistance to small states, fragile and conflict-affected states, and countries hosting refugees.
Support for poorest and most vulnerable members; debt and financing initiatives
- Ensuring IMF can support poorest and most vulnerable members without substantial market access is essential.
- Welcome extension of debt service relief for another six months under the Catastrophe Containment and Relief Trust (CCRT).
- Welcome progress made in securing additional loan resources for the Poverty Reduction and Growth Trust (PRGT).
- Support efforts to further expand PRGT and CCRT resources and look forward to additional grant contributions, including from new participants.
- Support extension of the Debt Service Suspension Initiative (DSSI).
- Express disappointment at absence of progress of private creditors’ participation in the DSSI; strongly encourage private creditor participation on comparable terms when requested by eligible countries.
- Encourage full participation of official bilateral creditors.
- Ask the IMF to continue to support effective and transparent DSSI implementation, together with the World Bank.
- Welcome G20 agreement in principle on a “Common Framework for Debt Treatment beyond the DSSI,” also agreed by the Paris Club.
- Look forward to publication of the Common Framework by the time of the G20 Finance Ministers and Central Bank Governors meeting in November 2020.
- Welcome IMF efforts to facilitate timely and comprehensive debt resolution by:
- Supporting enhanced coordination of official creditors.
- Identifying gaps in the international architecture for resolution of private claims and engaging with private creditors and other stakeholders.
- Reviewing IMF policies related to sovereign debt.
- Call on the IMF to prepare an analysis of the external financing needs of developing countries and sustainable financing options.
IMF resources, governance, and next steps
- Reaffirm commitment to a strong, quota-based, and adequately resourced IMF at the center of the global financial safety net.
- Welcome progress on making effective the doubling of the New Arrangements to Borrow (NAB) and the new round of bilateral borrowing agreements (BBA) on January 1, 2021.
- Urge all NAB and BBA participants to secure domestic ratification of their participation as soon as possible.
- Will keep demand for IMF resources under close review.
- Remain committed to revisiting adequacy of quotas and to continuing IMF governance reform under the 16th General Review of Quotas, including a new quota formula as a guide, by December 15, 2023.
- Next meeting is expected to be held on April 10, 2021.
International Monetary Fund communiqué, October 15, 2020.