Faster recovery rate

WASHINGTON - The steering committee of the International Monetary Fund said the global economy is recovering faster than expected from the COVID-19 crisis, but warned that a spike in interest rates could be especially painful for emerging economies.

In its communique, the International Monetary and Financial Committee stressed the importance of accelerating distribution of COVID-19 vaccines around the world, and pledged to strengthen international co-operation.

“Elevated financial vulnerabilities could pose risks, should global financial conditions tighten swiftly,” the 24-member committee said.

“The crisis may cause extended scarring and exacerbate poverty and inequalities, while climate change and other shared challenges are becoming more pressing.”

IMF managing director Kristalina Georgieva told a news conference that all IMFC members had strongly endorsed a $650 billion expansion of the Fund’s Special Drawing Rights monetary reserves, especially those representing middle-income countries.

The distribution of the reserves would especially help these countries to bolster their financial resources, which remain strained by the year-long pandemic, she said.

Ms Georgieva also said that negotiating a new agreement on the IMF’s main quota resources will be difficult, but IMF member countries are showing strong engagement in the process.

“What I took from the meeting are two messages. One, strong support for the IMF at the center of the global financial safety net and clear willingness of all members to see us resourced adequately to do our job.”