IMF Extends $7.3 Bln Debt Payment Freeze for 46 Countries

IMF Executive Director Mahmoud Mohieldin said on Sunday that the fund will extend a freeze in debt service payments through June 2021 to 46 countries.

The G20 Debt Service Suspension Initiative (DSSI) has already helped countries defer some $5.7 billion in payments through the end of 2020 to 43 countries, with another $7.3 billion in deferred payments expected through June.

Separately, the Mohieldin said its executive board had approved a third tranche of grants for its 28 poorest member countries, including Yemen, under the Catastrophe Containment and Relief Trust (CCRT) to cover all eligible debt service falling due to the IMF.

He added that there could also be scope for a selective capital increase to address specific needs resulting from the pandemic.

The IMF Executive Directors office emphasized the need to take more comprehensive measures to avoid the debt crisis, including improving the transparency of debt data, expanding capacity development for debt management, and considering reform of the international debt structure.

While the temporary freeze in debt payments would help, actual debt relief would be needed in the longer term to allow the poorest countries to reduce their unsustainable debt burdens to a more moderate level.

In mid-January, the board discussed a new framework for assessing public debt sustainability in market access countries, along with ongoing work on a multi-pronged approach to addressing debt vulnerability.