The Comoros is getting $12 million cash from the International Monetary Fund (IMF) to respond to COVID-19 pandemic.
About $4.05 million was approved under the RCF and $8.08 million was approved under the RFI.
“The COVID-19 shock comes on the heels of two difficult years for Comoros, and less than a year after Cyclone Kenneth. While the authorities have so far not reported an outbreak of the COVID-19 pandemic in Comoros, the pandemic is already having a severe economic impact as remittances receipts have slowed, visitor arrivals have stopped, and several banks have seen liquidity strains,” said Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair.
He said the pandemic is generating large external and fiscal financing needs.
“Financing under the Rapid Credit Facility (RCF) and the Rapid Financing Instrument (RFI), as well as debt relief provided earlier this month under the Catastrophe Containment and Relief Trust, will help cover important parts of these needs. Timely support by donors and development partners will be critical for filling the remainder,” he added.
Beyond the $12 million disbursement, the Comoros’ authorities should use fiscal policy to cushion the adverse effects of the COVID-19 shock and bring the fiscal position back in line with medium-term paths once the crisis has passed.
“In particular, in addition to expanding very substantially healthcare spending to meet the population’s pandemic-related needs, the authorities should consider giving targeted and temporary support to the most vulnerable.
“Monetary policy should focus on maintaining the exchange rate peg. At the same time, the authorities should use all tools at their disposal to safeguard the stability of the banking system, including by providing liquidity to banks facing liquidity pressures and addressing loan servicing difficulties.
“Finally, it will be important for the authorities to ensure robust reporting on the use of the funds disbursed under the RCF and RFI,” he said.