The IMF´s Resources in the Face of COVID-19 Crisis

12 Pages Posted: 27 Jul 2021

Date Written: July 23, 2021

Abstract

In the year since the onset of the pandemic caused by COVID-19, the International Monetary Fund (IMF or the Fund) has granted loans and emergency financing to over 85 countries, an unprecedented number. In the past, a shock on this scale would have brought the issue of the sufficiency of its resources centre-stage. However, on this occasion, given the characteristics of the loans granted, the IMF’s general resources have not been excessively squeezed. Pressure has been greater on the concessional resources granted to low-income countries. Against this background, the IMF’s general and concessional resources have two different needs to contend with. In the case of the former, the IMF has the leeway to respond to any future increase in the demand for ordinary financing and, if necessary, it could activate its temporary resources. Conversely, in the case of the latter, it must ensure there are sufficient resources to avert stiffer concessional financing terms for the most vulnerable countries, in what is the most complicated economic juncture of recent decades. The IMF should obtain new borrowed resources as these countries progressively replace emergency assistance with conditional financing.

Keywords: IMF, resources, concessional financing, COVID-19

JEL Classification: F03, F33, F34

Suggested Citation

Garrido, Isabel and Serra, Xavier and Gallego Herrero, Sonsoles, The IMF´s Resources in the Face of COVID-19 Crisis (July 23, 2021). Banco de Espana Article 27/21, Available at SSRN: https://ssrn.com/abstract=3892104

Isabel Garrido (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Xavier Serra

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es/

Sonsoles Gallego Herrero

Banco de España ( email )

Madrid 28014
Spain

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