- Kenya received $739 million from IMF in May
- They asked private banks and creditors should stop collecting poor country debts.
Kenya is among 73 countries granted access to a $173 billion special fund aimed at cushioning poor countries in times of global emergencies.
The Special Drawing Rights (SDR) to the fund by rich countries and administered by the IMF is aimed at mitigating the impact of the coronavirus on their economies
The International Monetary Fund Fund IMF) said this at the just concluded 'Financing the 2030 Agenda for Sustainable Development in the Era of COVID-19 and Beyond' meeting convened by the United Nations.
IMF head Kristalina Georgieva said majority of the developing countries face a deepening crises.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
So far SDR 204.2 billion (equivalent to about US$281 billion) has been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis.
The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British Sterling pound.
The SDR basket is reviewed every five years, or earlier if warranted, to ensure that the basket reflects the relative importance of currencies in the world’s trading and financial systems.
During the last review in November 2015, the IMF Board decided that the Chinese renminbi (RMB) met the criteria for SDR basket inclusion.
This announcement comes just four months after the international lender approved the disbursement of SDR542.8 million (100 percent of quota) worth $739 million) to Kenya which was drawn under the Rapid Credit Facility (RCF).
The amount was to help Kenya meet urgent balance of payment needs stemming from the outbreak of the Covid-19 pandemic.
The World Bank and several Finance ministers joined the IMF in a call to extend a 2020 coronavirus debt relief initiative into 2021 to support the 73 poorest countries.
They also argued that private banks and creditors should stop collecting poor country debts.
Kenya however declined the G20's offer on debt suspension aimed at helping poor countries weather the COVID-19 pandemic,saying the terms were too restrictive.
The Finance ministers' meeting aims at presenting a single menu of policy options to the Heads of State and Government to recover from the current crisis in the short term and mobilise the financial resources to achieve the 2030 Agenda and its Sustainable Development Goals (SDGs).
Mahmoud Mohieldin, the UN secretary general's Special Envoy on Financing the 2030 Agenda said, while some advanced economies spend the equivalent of 10 per cent of their economic output on pandemic response programmes, poor countries cannot even attain one per cent of spending.
''As a result of the pandemic the world's gross domestic product, foreign direct investment and remittances are estimated to drop in 2020 by 4.9 per cent, 40 per cent, and 20 per cent, respectively,''Mohieldin said.
In the second quarter of the year, hours of work dropped 14 per cent, equivalent to a loss of 400 million full-time jobs, and global merchandise trade declined by 18.5 percent.