{
  "title": "IMF Executive Board Approves a SDR 258.4 Million Disbursement under the Rapid Credit Facility and Purchase under the Rapid Financing Instrument to Myanmar to Address the COVID-19 Pandemic",
  "publication": "IMF News, January 13, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/01/13/pr219-myanmar-imf-execboardapproves-sdr258-4m-disburse-under-rcf-purchase-rfi-address-covid19",
  "canonical": "https://www.imf.org/en/news/articles/2021/01/13/pr219-myanmar-imf-execboardapproves-sdr258-4m-disburse-under-rcf-purchase-rfi-address-covid19",
  "overlayPath": "/en/news/articles/2021/01/13/pr219-myanmar-imf-execboardapproves-sdr258-4m-disburse-under-rcf-purchase-rfi-address-covid19/index.md",
  "summary": "The Executive Board approved:",
  "publishDate": "2021-01-13",
  "sections": [
    {
      "heading": "Approval and Financial Details",
      "content": "- The Executive Board approved:\n  - a disbursement of SDR 86.1 million (16.67 percent of quota) under the Rapid Credit Facility (RCF).\n  - a purchase of SDR 172.3 million (33.33 percent of quota) under the Rapid Financing Instrument (RFI).\n- The IMF described this as the second emergency financial assistance under the RFI/RCF for Myanmar since the outbreak of the pandemic.\n- The IMF stated the assistance is equivalent to about US$350 million for this round.\n- Earlier disbursement: on June 26, 2020, the IMF Executive Board approved a disbursement of US$ 356.5 million.\n- The combined IMF financial assistance provided to Myanmar to address the COVID-19 pandemic was reported as about US$ 700 million after this approval."
    },
    {
      "heading": "Purpose and Intended Use",
      "content": "- The financing aims to:\n  - meet urgent balance-of-payments needs arising from the COVID-19 pandemic.\n  - support the government’s recovery measures to ensure macroeconomic and financial stability while supporting affected sectors and vulnerable groups.\n  - catalyze additional support from the international community.\n- The IMF emergency assistance, together with additional external support and the Debt Service Suspension Initiative, would:\n  - cover higher social spending needs under continued strains on revenues.\n  - mitigate the risk of excessive monetary financing."
    },
    {
      "heading": "Economic Impact and Projections",
      "content": "- The IMF reported that Myanmar’s economy was hit hard by the second wave of the COVID-19 pandemic, inflicting large economic and social costs and straining the healthcare system.\n- Growth projections reported:\n  - Economic growth is projected at 3.2 percent for FY2019/20 (starting October 1), a sharp decline from 6.8 percent in FY2018/19.\n  - For FY2020/21, growth is expected to fall to 0.5 percent.\n  - Growth is expected to rebound to 7.9 percent in FY2021/22 reflecting the gradual recovery and strong base effects.\n- The IMF warned of:\n  - disproportionate effects on lower income groups, SMEs, and those in conflict regions.\n  - permanent losses in medium-term output, raising concerns of increased poverty."
    },
    {
      "heading": "Government Response: CERP and MERRP",
      "content": "- The government is formulating the Myanmar Economic Resilience and Reform Plan (MERRP).\n- The MERRP:\n  - builds on last April’s emergency relief measures under the COVID-19 Economic Relief Plan (CERP).\n  - extends relief measures and adds macroeconomic and financial stability measures to guide the recovery.\n  - prioritizes increasing healthcare spending, tax relief measures, and transfers to vulnerable households.\n  - emphasizes equitable extension of programs across the country, including in conflict regions and ethnic minorities.\n- The IMF noted the authorities’ progress in enhancing spending transparency and their commitment to further enhance governance, transparency, and accountability to ensure appropriate use of this emergency financing."
    },
    {
      "heading": "Recommendations and Observations from the Acting Chair (Mr. Mitsuhiro Furusawa)",
      "content": "- Observations:\n  - Myanmar’s economy suffered from a second COVID-19 wave, resulting in extensive lockdowns, declines in tourism, and supply chain disruptions.\n  - The accommodative monetary policy stance is appropriate and the Kyat is adjusting flexibly, with limited rules-based interventions managing excessive short-term volatility.\n- Recommendations and suggested actions:\n  - Once conditions allow, focus on enhancing the effectiveness of the monetary policy framework and further building external buffers.\n  - Further strengthen banking sector stability to underpin the recovery:\n    - monitor non-performing loans (NPLs).\n    - accelerate preparation of contingency plans to better manage banking sector stresses, should they materialize.\n    - conduct targeted asset quality reviews of systemically important banks, followed by a comprehensive strategy for NPL resolution and bank recapitalization.\n  - Address remaining gaps in the AML/CFT framework.\n  - Continue leveraging capacity development and technical assistance from the Fund and other development partners to further reforms."
    },
    {
      "heading": "Additional Information",
      "content": "- The press release noted links for more information:\n  - IMF Lending Tracker for emergency financing requests.\n  - Calendar of the IMF Executive Board meetings.\n\nIMF Press Release No. 21/9, January 13, 2021 — IMF Communications Department\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Myanmar and the IMF\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- IMF Press Release No. 20/247\n- https://www.imf.org/en/Topics/imf-andcovid19/Policy-Responses-to-COVID-19\n- https://www.imf.org/external/NP/SEC/bc/eng/index.aspx\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/01/13/pr219-myanmar-imf-execboardapproves-sdr258-4m-disburse-under-rcf-purchase-rfi-address-covid19"
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    "Published: January 13, 2021",
    "The Executive Board approved:",
    "The IMF described this as the second emergency financial assistance under the RFI/RCF for Myanmar since the outbreak of the pandemic.",
    "The IMF stated the assistance is equivalent to about US$350 million for this round.",
    "Earlier disbursement: on June 26, 2020, the IMF Executive Board approved a disbursement of US$ 356.5 million.",
    "The combined IMF financial assistance provided to Myanmar to address the COVID-19 pandemic was reported as about US$ 700 million after this approval.",
    "The financing aims to:",
    "The IMF emergency assistance, together with additional external support and the Debt Service Suspension Initiative, would:",
    "The IMF reported that Myanmar’s economy was hit hard by the second wave of the COVID-19 pandemic, inflicting large economic and social costs and straining the healthcare system.",
    "Growth projections reported:",
    "The IMF warned of:",
    "The government is formulating the Myanmar Economic Resilience and Reform Plan (MERRP).",
    "The MERRP:",
    "The IMF noted the authorities’ progress in enhancing spending transparency and their commitment to further enhance governance, transparency, and accountability to ensure appropriate use of this emergency financing.",
    "Observations:",
    "Recommendations and suggested actions:",
    "The press release noted links for more information:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Myanmar and the IMF](http://www.imf.org/external/country/MMR/index.htm)",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Press Release No. 20/247](https://www.imf.org/en/News/Articles/2020/06/26/pr20247-myanmar-imf-executive-board-approves-a-us-356-5m-disbursement-address-covid19)",
    "[https://www.imf.org/en/Topics/imf-andcovid19/Policy-Responses-to-COVID-19](https://www.imf.org/en/Topics/imf-andcovid19/Policy-Responses-to-COVID-19)",
    "[https://www.imf.org/external/NP/SEC/bc/eng/index.aspx](https://www.imf.org/external/NP/SEC/bc/eng/index.aspx)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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