How Vulnerable Countries Could Tap Into a $1 Trillion Emergency Fund to Fight Coronavirus
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The International Monetary Fund has pledged $1 trillion to help countries struggling with the economic and humanitarian repercussions of the coronavirus, which has led to more than 6,500 deaths worldwide.
In a statement posted on its website today, the Washington, D.C.-based organization said that it was “ready to help” countries with a trillion-dollar lending capacity, as well as emergency financing of roughly $50 billion for low-income and emerging market countries. It expressed concern for its more vulnerable members — those with weak health systems and at higher risk for spillovers — whose financing needs are rising rapidly amid the outbreak.
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“With over one-third of our membership affected directly, this is no longer a regional issue — it is a global problem calling for a global response,” managing director Kristalina Georgieva wrote. “The Fund is fully committed to supporting our member countries, particularly the most vulnerable; we have the tools to help, and we are coordinating closely with our partner institutions.”
Industries across the board have been suffering losses — including the import-export industry, which has faced port closures and weeks of slowed production overseas, as well as the retail sector, which has seen widespread store closures or significantly reduced operating hours for outposts that remain open.
In an effort to contain the spread of COVID-19, many governments around the world have imposed restrictions or bans on travel. Yesterday, New York and Los Angeles made the unprecedented move of shuttering bars, restaurants, theaters and more public spaces that invite large gatherings and close interactions — as the virus is known to spread mainly from person-to-person contact, according to the Centers for Disease Control and Prevention. (Restaurants in New York and Los Angeles will remain open for takeout and delivery services.)
What’s more, the Federal Reserve yesterday slashed interest rates to nearly zero in an emergency move to help the U.S. economy weather the pandemic. It set the benchmark to the range of 0% to 0.25% — the second time the central bank had cut rates over the past two weeks.
“The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the Fed said in a statement. “The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook.”
In the U.S., confirmed cases of the coronavirus have climbed to almost 3,500, with at least 65 deaths recorded. Globally, upwards of 169,000 cases have been reported.
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