G-20 okeys debt standstill for the world’s poorest nations

G20 set an action plan against coronavirus on Wednesday and agreed to support a time-bound suspension of debt service payments for the poorest countries that request forbearance. 

According to the statement, the financial response includes delivering a comprehensive IMF support package, urgently implementing more than $200 billion in support proposed by the World Bank and multilateral development banks, and addressing debt vulnerabilities in low-income countries due to the pandemic.

Key notes from statement

“Our efforts must continue and be amplified. We commit to use all available policy tools to support the global economy, maintain financial stability and prevent deep economic effects.”

“We agreed on a coordinated approach with a common term sheet providing the key features for this debt service suspension initiative, which is also agreed by the Paris Club.”

“We ask multilateral development banks to further explore the options for the suspension of debt service payments over the suspension period, while maintaining their current rating and low cost of funding.”  

“We support the further adoption and swift implementation of a strong financial response to help countries in need and to uphold global financial stability and resilience,” it said.

Meanwhile, markets are in risk-off mode and US coronavirus deaths set single-day record increase of 2,371, totalling 30,817 – Reuters tally