COVID-19: Investors pulled out $83bn from emerging markets -IMF
Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva has said at least $83bn has been pulled out of emerging economies since the Covid-19 outbreak.
“We have already seen investors pulling $83 billion from emerging markets since the beginning of the crisis. The largest capital outflow ever recorded” she said in a podcast yesterday.
Georgieva said following the impact of the Covid-19, the Fund will massively step up emergency finance as nearly 80 countries are requesting help.
“We welcome the moves of major central banks to ease monetary policy. These are bold efforts and they are not only in the interest of each individual country, but of the global economy as a whole. Even more will be needed, especially on the fiscal front.
“Advanced economies are generally in a better position to respond to the crisis, but many emerging markets and low-income countries face significant challenges. They are badly affected by outward capital flows and domestic activity will be severely impacted as countries respond to the epidemic.
“We have already seen investors pulling $83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded. We are particularly concerned about low income countries in debt distress. It is an issue in which we are working very closely with the World Bank. Third, what can we, the IMF do to support our members?” she queried
Georgieva noted that several low- and middle-income countries have asked the IMF to make an SDRs allocation as it did during the global financial crisis, saying that the Fund is exploring this option its membership.
According to her, as the global liquidity crunch takes hold, the institution needs members to provide additional swap lines, adding that “we will be exploring with our executive board and membership a possible proposal that would help facilitate a broader network of swap lines, including through an IMF swap-type facility.
“These are extra ordinary circumstances. Many countries are already taking unprecedented measures. We at the IMF working with all our member countries will do the same. Let us stand together through this emergency to support all people across the world. Together we can get through it” she said.