## Transcript of Background Briefing Conference Call on IMF Resources and the Fund’s Strategy to Help Countries Combat COVID-19

_IMF News, April 1, 2020_

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## Bibliographic details
- Published: April 1, 2020

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### Overview of the IMF’s emergency financing tools and usage
- IMF has available "$50 billion for rapid emergency finance."
- Two rapid-access emergency facilities highlighted:
  - General financing instrument available to all members: access of "50 percent of their quota" to extract quickly to address health- and virus-related spending; standard Fund safeguards apply (debt sustainability requirement; funds used for intended purpose).
  - Rapid Credit Facility (RCF) for countries eligible for subsidized lending: also "50 percent" access; includes annual access limits; "zero interest rate and a longer repayment period."
- Poverty Reduction and Growth Trust (PRGT) finances subsidized lending for low-income members off the Fund’s regular balance sheet; gearing up to disburse "rapid and by our standards large amounts" from the PRGT through emergency windows.
- Catastrophe Containment and Relief Trust (CCRT): reform passed to help poorest members with debt payments to the Fund during the pandemic so they can repurpose repayments to fight the pandemic.

### Scale of demand, commitments, and IMF capacity
- More than "80" countries have requested assistance or inquired about emergency funds.
- Reported cumulative volume of requests/inquiries is "north of $20 billion" so far.
- Managing Director referenced potential financing needs for emerging markets of around "$2.5 trillion" (noted as a hypothetical gross financing need, not equivalent to IMF demand).
- IMF lending capacity:
  - Total lending capacity through quota and borrowing arrangements: "$1 trillion."
  - Recent developments supporting capacity:
    - Doubling of the NAB approved by the Executive Board; ratification by the United States of the doubling in their net contribution was noted.
    - Executive Board approved framework for the next round of bilateral borrowing arrangements to be in place by January 1 when current arrangements expire.
  - Usage to date: "We have so far committed about one fifth of those resources" and "we have roughly four fifth of that $800 million still available as it's needed."

### Proposed and discussed additional instruments
- Short-term liquidity line (new facility concept):
  - Intended to fill a gap to provide short-term, revolving access for members with strong policy frameworks (similar eligibility to the Flexible Credit Line, FCL).
  - Access would be "much more limited" than the FCL; described access calibration example "145 percent of the quota" (as a much lower level than uncapped FCL).
  - Designed to operate on a revolving basis for as long as the country qualifies, providing a smoother transition between FCL and the new facility.
  - Preparatory work done; not in place now; could be implemented quickly if membership support emerges.
- SDR allocation:
  - Referred to as an option (comparable to the sizeable SDR allocation in 2009); may help countries boost reserves and ease foreign exchange pressures.
  - Requires broad membership consensus; "there’s no conclusion on an SDR allocation" at this time.
- Central bank swap lines and IMF role:
  - Distinction made between (i) a Fund short-term liquidity facility and (ii) central bank swap lines (e.g., Federal Reserve swap lines).
  - IMF can act as a facilitator in transactions combining Fund facilities and central bank operations, but such arrangements require participation and requests from central banks and countries.

### Policy approach, conditionality, and operational changes
- Emergency facilities have reduced policy conditionality relative to standard programs but retain key safeguards:
  - Requirement that financing be used to address underlying balance of payments needs (here: health spending and pandemic response).
  - Debt sustainability must be preserved — Fund will not deviate from safeguards ensuring eventual repayment.
- Streamlining and faster processing measures:
  - Internal and Executive Board process streamlining to expedite requests (shorter circulation periods, intensified internal review).
  - Staff working extended hours to process high volumes of simultaneous requests; first RFI/RF-type case (Kyrgyz Republic) processed and Board-approved.
- FCL and short-term liquidity line conditionality:
  - Both use ex ante conditionality (high qualification bar) rather than post-approval program conditionality; FCL is effectively "uncapped in principle," while the short-term liquidity line would be capped and revolving.

### Debt relief / official creditor standstill discussions
- Proposal discussed by IMF Managing Director and World Bank President: an official bilateral creditor "standstill" to suspend debt service payments temporarily so low-income countries can repurpose resources to fight the epidemic.
  - Emphasized as a temporary liquidity measure, not broad debt forgiveness.
  - Modalities (role of multilateral and private creditors, sequencing, implementation steps) remain to be worked out and require discussion among creditors and membership.
  - Fund has already reformed the CCRT to provide equivalent relief for IMF repayments during the pandemic.

### Key operational and governance notes
- The Fund emphasized rapid response while recognizing constraints of member consensus and institutional processes when considering new instruments.
- Preparatory work and prior planning (e.g., NAB doubling, bilateral borrowing framework) put the Fund "in good shape to meet members' needs during the crisis."
- The briefing date: "April 1, 2020." Media contact: Maria Candia; Phone: "+1 202 623-7100"; Email: "MEDIA@IMF.org"; IMF Twitter: "@IMFSpokesperson."

*Transcript of Background Briefing Conference Call on IMF Resources and the Fund’s Strategy to Help Countries Combat COVID-19 — April 1, 2020 — IMF Communications Department*

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## References

- [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)
- [Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)
- [United States and the IMF](http://www.imf.org/external/country/USA/index.htm)
- [Conditionality](https://www.imf.org/en/about/factsheets/sheets/2023/imf-conditionality)
- [IMF Quotas -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-quotas)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Transcripts](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/04/03/tr040120-transcript-background-briefing-conference-call-imf-resources-strategy-help-combat-covid-19_