NEW YORK: Managing Director of the International Monetary Fund, Kristalina Georgieva, unveiled a $50 billion aid package to help combat coronavirus, as UN economists expected a sharp drop in global production.
Ms. Georgieva said the money is available instantly on CNBC television, Thursday, which is for low-income and emerging market countries.
Most of the money will be interest-free, so countries don’t need to engage in a pre-existing program with the IMF, she said.
What they have been doing right now is analyzing country by country what the financial needs are, and communicating with these countries to ensure that they are aware of this tool and that we can respond to it immediately, Georgieva said.
Around the world, there are over 90,000 confirmed coronavirus outbreaks, and the epidemic has spread to six continents.
The disease has introduced extreme travel restrictions in China and Italy’s key economic hubs.
Georgieva said the IMF would like to see the money used mainly to fund healthcare systems and then tailored fiscal stimulus measures and help with liquidity.
The group is also collaborating with the World Bank to help countries procure some of the medical equipment that is used to fight the virus, such as surgical masks and respiratory equipment.
On Monday the World Bank unveiled a $12 billion program to help poor nations cope with the epidemic’s health and economic implications.
Countries around the world should also consider creating measures to help the economy during an economic slowdown, such as providing credit lines to smaller businesses and incentive systems for employees who need to stay home.
“We think it is now the time to put in place precautionary measures should the outbreak become more severe,” Georgieva said.
She said earlier Wednesday at an event in Washington, D.C., that, “We are faced with a generalized weakening in demand, and that goes through confidence and through spillover channels, including trade and tourism, commodity prices, tightened financial conditions.
“They call for an additional policy response to support demand and ensure an adequate supply of credit,” she added.
The announcement comes in the midst of coordinated action by world central banks.
The U.S. Federal Reserve reported a 50-point fall on Tuesday, followed by a change of the same size on Wednesday by the Bank of Canada.