COVID-19: Singapore to provide more than S$26 million to IMF initiatives for vulnerable countries

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The Monetary Authority of Singapore (MAS) building in Singapore. (Photo: AFP/Roslan Rahman)

SINGAPORE: Singapore will join international efforts to support initiatives of the International Monetary Fund (IMF) aimed at helping vulnerable low-income countries cope with the economic impact of the COVID-19 pandemic, the Monetary Authority of Singapore (MAS) said on Wednesday (Mar 31).

Singapore will contribute US$19.6 million (S$26.4 million) to the IMF’s Catastrophe Containment and Relief Trust and the COVID-19 Crisis Capacity Development Initiative.

An additional US$970,000 will go towards an IMF financing package for Somalia’s debt relief.

The provision of the grants will be subject to Parliament’s approval on Apr 5. 

“Singapore has a strong interest in supporting the global economic recovery from the ongoing COVID-19 pandemic,” MAS said in a media release.

“Alongside other member countries’ contributions, Singapore’s grant contributions in response to the IMF’s request also demonstrates our support for collective global action to help the most vulnerable countries.”

The majority of Singapore’s contribution, US$17.6 million, will go to the Catastrophe Containment and Relief Trust, which was set up in 2015 to provide debt relief to the IMF’s poorest members in the event of natural disasters or global health pandemics.

The trust currently needs replenishment of US$1.4 billion to help strengthen healthcare systems in low-income countries.

Singapore will also contribute US$2 million to the COVID-19 Crisis Capacity Development Initiative, which is expected to raise US$100 million to support the urgent capacity development needs of countries hit by the pandemic.

“Singapore’s grant to the COVID-19 Crisis Capacity Development Initiative is commensurately sized, relative to the contributions from larger countries,” MAS said.

The grants to the Catastrophe Containment and Relief Trust and the COVID-19 Crisis Capacity Development Initiative will be drawn from MAS’ Official Foreign Reserves, the central bank said.

Finally, a grant of US$970,000 will be provided to the Trust for Special Poverty Reduction and Growth Operations for the Heavily Indebted Poor Countries to support a US$344 million IMF financing package for Somalia’s debt relief.

“The IMF has assessed that Somalia’s external debt is unsustainable and it requires urgent assistance to clear its prolonged arrears,” MAS said.

“Singapore’s grant to the Trust for Special Poverty Reduction and Growth Operations for the Heavily Indebted Poor Countries will come entirely from Singapore’s share of existing resources in other IMF accounts, and will not impact the size of Singapore’s Official Foreign Reserves,” MAS added.