‘Monetary policy cannot provide all the answers to the global crisis’, IMF advises Central Banks.
The International Monetary Fund (IMF) is poised to disburse $1 trillion to member countries in abid to help them recover from the economic devastation caused by the coronavirus pandemic.
This was announced In a joint statement by Managing Director of the Fund, Kristalina Georgieva alongside its Financial Committee Chair, Lesetja Kganyago, on Friday.
Mr Georgieva, observed that the coronavirus, which began as a “global health pandemic, has turned into an economic and financial crisis.”
“We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis.
“With a sudden stop in economic activity, global output will contract in 2020.”
In the face of the crisis, the IMF said priority should be given to targeted fiscal support to vulnerable households and businesses to accelerate and strengthen the recovery of their economies by 2021.
The group said that emerging market and developing countries, especially low-income countries like Nigeria, would be particularly hard hit by a combination of a health crisis, a sudden reversal of capital flows and a sharp drop in commodity prices, Premium Times reports.
“Many of these countries need help to strengthen their crisis response and restore jobs and growth, given foreign exchange liquidity shortages in emerging market economies and high debt burdens in many low-income countries.
“Strong and coordinated policy actions, including at the multilateral level, are key to effectively resolve this global crisis,” the group said.
The IMF said it has already taken action to provide relief for debt repayments for its poorest members under the Catastrophe Containment and Relief Trust.
