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Korea: Keep supporting people and the economy until recovery fully under way

Korea has limited the damage to its economy from the COVID-19 crisis with swift and effective measures to contain the virus and protect households and businesses. Support for workers and the export-dependent economy should continue, given falling employment and the risk of prolonged disruption to trade and global value chains, according to a new OECD report. Thanks to the government’s prompt response to the pandemic, Korea is experiencing the shallowest recession among OECD countries. However, the recovery will be slow and uncertainty remains high, says the latest OECD Economic Survey ...

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Arab Republic of Egypt : Request for a 12-Month Stand-By Arrangement-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt

Egypt’s hard-won macroeconomic stability achieved during the three-year arrangement under the Extended Fund Facility (EFF) now faces a significant disruption due to the COVID-19 pandemic. Growth is expected to slow in both FY2019/20 and FY2020/21 as tourism has been halted and domestic activity curtailed. The external accounts have come under pressure due to capital outflows and the shock to tourism and remittances. The authorities responded with a broad package to scale up the health system’s capacity and policies to support the people and the economy. Source: International Monetary Fund

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IMF willing to redouble Lebanon efforts, subject to reform commitment

The International Monetary Fund said on Sunday it was willing to redouble efforts to help Lebanon after the devastating blast that hit Beirut, but said all of the country’s institutions needed to show willingness to carry out reforms. In a statement to an emergency donor conference for Lebanon, the IMF’s managing director, Kristalina Georgieva, laid out reforms expected, including steps to restore the solvency of public finances and the soundness of the financial system, and temporary safeguards to avoid continued capital outflows. Even before the massive explosion that killed 158 ...

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Statement by IMF Managing Director Kristalina Georgieva on the International Conference on Support to Beirut and the Lebanese People

Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), made the following statement today at the end of the high-level “International Conference on Support to Beirut and the Lebanese People” after the August 4 explosion: “I would like to thank French President Emmanuel Macron for bringing us together just days after the devastating explosion in Beirut and express heartfelt solidarity with the Lebanese people. It is a terrible tragedy, coming at a terrible time. Lebanon has been struggling with profound economic and social challenges, aggravated by a pandemic, ...

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IMF to start negotiating new Argentine lending deal over coming weeks

Argentina will start talks with the International Monetary Fund in the coming weeks aimed at clinching a new program to replace a defunct $57 billion standby lending deal from two years ago, a top IMF official told Reuters on Saturday. In 2018, Argentina received the biggest lending package in IMF history in an ill-fated bid to halt a slide in the local peso currency. About $44 billion of the allotted cash has been paid out so far. “Within the next few weeks Argentina plans to formally request the initiation of ...

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China’s external position in 2019 broadly in line with fundamentals: IMF

China’s external position in 2019 was broadly in line with the level “implied by medium-term fundamentals and desirable policies,” the International Monetary Fund (IMF) said in its new External Sector Report released Tuesday. “Policy reactions have appropriately prioritized support to the most affected households, workers, and firms, with increased focus on further supporting the demand recovery,” the IMF said. The multilateral lender said China has room to provide more policy support if needed, including on green investment and strengthening the public health system and social safety net. “If imbalances that ...

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Global Imbalances and the COVID-19 Crisis

The world entered the COVID-19 pandemic with persistent, pre-existing external imbalances. The crisis has caused a sharp reduction in trade and significant movements in exchange rates but limited reduction in global current account deficits and surpluses. The outlook remains highly uncertain as the risks of new waves of contagion, capital flow reversals, and a further decline in global trade still loom large on the horizon. Our new External Sector Report shows that overall current account deficits and surpluses in 2019 were just below 3 percent of world GDP, slightly less ...

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IMF Executive Board Approves a US$152.61 Million Disbursement Under the Rapid Financing Instrument to Gabon to Address the COVID-19 Pandemic

The Executive Board of the International Monetary Fund (IMF) today approved a purchase of SDR108 million (about US$152.61 million) under the Rapid Financing Instrument (RFI). This is the second purchase under the RFI to Gabon since the onset of the pandemic. It aims at helping Gabon in meeting its urgent balance of payments needs. This follows the Executive Board’s decision of April 9, 2020 to double temporarily the annual access limit under the RFI to 100 percent of quota (see IMF Policy Paper No. 20/018). Today’s purchase brings total IMF ...

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Greece’s response to Covid-19 has been swift and effective but tackling long-standing challenges also key

Greece has responded swiftly and effectively to the Covid-19 pandemic and has so far managed to contain the spread of infections, but the economy has been hit hard, adding to long-standing challenges, according to a new OECD report. In its latest Economic Survey of Greece, the OECD says government measures to strengthen the health system, support businesses and people’s incomes need to continue, but also adapt as the situation develops. Helping workers and firms move from badly affected sectors to activities with the best growth opportunities will be essential, it ...

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Dominant Currencies and the Limits of Exchange Rate Flexibility

Faced with an unprecedented shock of collapsing global demand and commodity prices, capital outflows, major supply chain disruptions and a generalized drop in global trade, many emerging markets and developing economies’ (EMDEs) currencies have weakened sharply. Will these currency movements support the recovery of these economies? Building on a new dataset, research laid out in a new IMF Staff Discussion Note indicates that the short-term gains from weaker currencies may be limited. This is especially true for EMDEs where firms price their international sales and finance themselves in a few ...

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IMF exploring additional tools to provide aid to pandemic-hit countries

The International Monetary Fund is exploring additional tools to provide financing to the world’s poorest countries and others hit hard by the coronavirus pandemic, Managing Director Kristalina Georgieva said on Saturday. Georgieva told finance ministers and central bank governors from the Group of 20 major economies that they should consider extending a freeze in official bilateral debt service payments offered to the poorest countries beyond the end of the year, and work to promote greater private-sector participation. Beyond that, she said there is a need to think about “more comprehensive ...

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IMF urges GCC, Arab states to balance reopening economy, keeping Covid cases down

The GCC and other Arab countries must have a right balance between opening up their economies and keeping coronavirus cases down over the next six months in order to ensure sustainable recovery, say economists and political analysts. While addressing a webinar on Thursday hosted by the International Monetary Fund, they stressed that the Arab governments will have to move away from job providers and shift this responsibility to the private sector and also do away with the patronage system. Monica Malik, chief economist of Abu Dhabi Commercial Bank, said getting ...

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China’s central bank chief urges IMF to open cash floodgate to fight pandemic

China’s top central banker has urged the International Monetary Fund (IMF) to issue hundreds of billions of dollars of liquidity to its 189 member countries through a general allocation of Special Drawing Rights (SDRs) despite U.S. objections. Yi Gang, governor of the People’s Bank of China, wrote in an opinion piece in the Financial Times that an issuance of SDRs – the IMF’s internal monetary unit – is needed to help countries to contend with the COVID-19 pandemic. “A general allocation of SDRs, which are sometimes called ‘liquid gold’ and ...

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IMF chief warns global economy ‘not out of the woods,’ dangers lurk

Global economic activity is picking up after an unprecedented decline this year due to the coronavirus pandemic, but a second major wave of infections could trigger more disruptions, the International Monetary Fund’s top official said. IMF Managing Director Kristalina Georgieva said the fiscal costs of actions aimed at containing the pandemic and mitigating its economic fallout were driving up already high debt levels, but it was premature to start withdrawing needed safety nets. “We are not out of the woods yet,” she said in a blog posting ahead of Saturday’s ...

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IMF official says withdrawing fiscal support prematurely amid COVID-19 pandemic “dangerous”

Despite record high global debt levels, governments should continue to extend lifelines to households and firms as countries gradually reopen their economies, an International Monetary Fund (IMF) official has said. “If we would be asked about the risk of very high debt levels versus the risk of premature withdrawal of fiscal support, we would say that it would be more dangerous to withdraw public’s fiscal support prematurely,” Vitor Gaspar, director of the IMF’s fiscal affairs department, told Xinhua in a recent video interview. According to IMF’s latest estimation, the pandemic ...

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