IMF fficial says we see coronavirus crisis shifting to emerging markets

Reuters reports that the International Monetary Fund officials said on Wednesday that "the coronavirus pandemic is putting major strains on emerging market economies, but are confident that the Fund has sufficient resources to meet their needs."

The fund is "quite a bit away" from exhausting its $1 trillion in total lending capacity and is working to identify new sources of funding and liquidity for member countries, the officials told a conference call with reporters.

Key notes

• IMF official says we see coronavirus crisis shifting to emerging markets.
• says quite a bit away from using $1 trillion in lending capacity.
• Says SDR allocations would give tools to emerging market countries, countries with debt sustainability issues.
• Says good news is that we are well-placed to help members.
• Says working with membership to generate new financial resources beyond the immediate wave of emergency lending.
• Says focus is on steps that can be taken quickly and pragmatically to respond to coronavirus crisis.
• Says when it comes to inventing new facilities, it takes a very long time.
• Says counterproductive to focus on things that would take a long time.
• Says must make sure that countries’ debt remains sustainable, cannot deviate from that, even in current situation.
• Says possible short-term liquidity line could be done relatively quickly.
• Say have received more than $20 bln in requests from more than 80 countries for emergency pandemic relief.
• Say most requesters are low-income countries, some emerging markets.
• IMF officials say see support for idea of debt service standstill.
• Say call for debt standstill does not mean there should be a broader round of debt forgiveness.
• Say short-term liquidity line could be implemented quickly, if approved by members.

FX implications

More to come...