April 14: In a bid to help Nepal combat the coronavirus (COVID-19) pandemic, the International Monetary Fund (IMF) has announced to provide financial support to Nepal. The Washington DC-based lender has said that 25 under-developed nations including Nepal will receive immediate grant-based debt service relief from IMF.  “Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic,” reads a press statement issued by Kristalina Georgieva, managing director of IMF. According to the statement, this provides grants to IMF’s poorest and most vulnerable members will help the countries to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts. 

The CCRT can currently provide about USD 500 million in grant-based debt service relief, including the recent USD185 million pledge by the United Kingdom and USD 100 million provided by Japan as immediately available resources. “Others, including China and the Netherlands, are also stepping forward with important contributions,” Georgieva said. She urged other donors to help replenish CCRT’s resources and boost further our ability to provide additional debt service relief for a full two years to the poorest member countries of IMF.

Besides Nepal, Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen are the recipients of the debt service relief.

The latest move of IMF is one of the several steps the Fund has taken over the last few months to help its members to face the challenges posed by the COVID-19 pandemic. IMF has been focusing its efforts to help poorer nations coordinating with the World Bank. The two organisations have asked developed nations to halt collection of debt payments from poor countries until June 2021.