The International Monetary Fund (IMF) on Friday approved the disbursement of $148 million to Guinea to respond to COVID-19 pandemic.
The IMF has now approved 70 requests for emergency financial assistance to help its member countries address the challenges posed by COVID-19.
The said the approval for the disbursement of $148 million to Guinea was made under the Rapid Credit Facility (RCF) to address urgent balance of payment and fiscal financing needs stemming from the COVID-19 pandemic.
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Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director at the IMF, said Guinea has been severely affected by the COVID-19 pandemic.
“Worsening global conditions and a rapidly spreading local outbreak have further weakened the short-term outlook. The pandemic and mitigation measures have given rise to urgent balance of payments and fiscal financing needs. The disbursement under the Rapid Credit Facility will provide timely support to address these needs and should help catalyze donors’ financial assistance,” Furusawa said.
He said using external buffers while allowing greater exchange rate flexibility will contribute to responding to the shock while preserving an adequate level of reserves.
“The central bank will continue to limit its interventions in the foreign exchange market and implement a rule-based intervention strategy. Monetary policy will be oriented towards preserving liquidity in the banking sector while containing inflation. To this end, limiting central bank budget financing will be important.
“Beyond addressing immediate needs stemming from the crisis, preserving medium-term fiscal and debt sustainability is key. For this, the authorities will target a lower-than-previously-planned primary fiscal deficit path once the crisis subsides. Ensuring debt transparency and moving forward with reforms to strengthen debt management will also be critical,’’ Furusawa added.