IMF approves second emergency financial aid for Myanmar

The International Monetary Fund (IMF) has approved the release of financial assistance amounting to SDR 258.4 million to help Myanmar minimize the economic and social impacts of the COVID-19 pandemic. A statement from the IMF released on January 13 said their executive board approved a disbursement of SDR 86.1 million (16.67 percent of quota) under the Rapid Credit Facility (RCF), and a purchase of SDR 172.3 million (33.33pc of quota) under the Rapid Financing Instrument (RFI) for Myanmar. The total adds up to approximately US$372 million.

The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. The value of the SDR is based on a basket of five currencies – the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. The IMF assistance will aid Myanmar’s COVID-19 policy measures aimed at minimizing the pandemic’s economic and social impact while supporting the vulnerable. “This will help meet the urgent balance-of-payments needs arising from the COVID-19 pandemic, especially the government’s recovery measures to ensure macroeconomic and financial stability while supporting affected sectors and vulnerable groups,” said the IMF.

“The IMF emergency financing will also catalyze additional support from the international community,” they added. According to the statement, this is the second emergency financial assistance that the IMF will be providing for Myanmar following the COVID-19 outbreak.
The IMF executive board approved a disbursement of US$ 356.5 million for Myanmar on June 26, last year. This brings the total IMF financial assistance provided to Myanmar to address the ongoing pandemic to approximately US$ 700 million.

“Myanmar’s economy is suffering from a second COVID 19 wave, resulting in extensive lockdowns, declines in tourism, and supply chain disruptions,” said Mitsuhiro Furusawa, deputy managing director and acting chair of the IMF. “The Rapid Credit Facility and Rapid Financing Instrument will help address Myanmar’s urgent financing needs related to the COVID 19 shock,” he said. “The authorities’ progress in enhancing spending transparency is commendable and they are committed to further enhance governance, transparency, and accountability to ensure the appropriate use of this emergency financing. Moreover, they continue to leverage capacity development and technical assistance from the Fund and other development partners to further their reforms,” he added.

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Source: Myanmar Times

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