IMF chief worries about middle-income countries with weaker fundamentals

By Andrea Shalal

WASHINGTON, April 7 (Reuters) – The head of the International Monetary Fund said on Wednesday that he would work with IMF members, whether they support offering low- or interest-free financing to middle-income countries hit hard by the pandemic. not only the worst. poor.

Managing Director Kristalina Georgieva said she was concerned about tourism-dependent and other middle-income countries, which have weaker bases and higher debt levels even before the pandemic, thus supporting the adoption of a broader definition of what makes a nation “vulnerable”.

The IMF’s Poverty Reduction and Growth Facility (PRGT) is currently able to provide only the poorest countries, limiting the ability of lower-income developing countries to receive low- or no-interest loans from older people. fund.

The United Nations and other institutions have called on the Group of 20 major economies to extend the freeze on official bilateral debt payments and a new common debt management framework to include such countries, many of which have been heavily affected by the pandemic and its economic effects. .

On Wednesday, G20 finance officials approved an $ 650 billion expansion of the IMF’s Emergency Reserves or Special Drawing Rights (SDRs) so that wealthier fund members will be able to lend to PRGT to help the poorest countries.

Georgieva said the IMF hopes to complete work on a formal proposal to allocate $ 650 billion in SDRs by mid-June, and that decisions are also being made for fund members to give their reserves to help poor countries.

He said it was “realistic” that members would be able to gain access to expanded reserves in mid-August, but declined to say how much SDRs could be shared by the richest countries.

Georgieva said the issue was raised during the G20 summit on Wednesday, stressing calls from Mexico and Argentina for greater debt relief for middle-income countries.

(Edited in Spanish by Carlos Serrano)