Good news for the economy sir: One year of breath to repay the loan
ISLAMABAD: Prime Minister Imran Khan on Thursday appreciated the steps to reduce debt by the G20 countries, the International Monetary Fund (IMF) and the World Bank for developing countries, including Pakistan which gave Pakistan a breath of one year to repay loans.
Imran praised debt reduction measures after Financial Adviser Dr Abdul Hafeez Sheikh told him during a meeting about a plan to approve additional $ 1.4 billion concession financing from the IMF to deal with the economic impact of the corona virus.
At its meeting in the Saudi capital, Riyadh on Wednesday, the G-20 included Pakistan in the group of countries that were eligible for debt relief from all principal and interest payments. The World Bank and International Monetary Fund (IMF) have urged the G20 to expand debt aid to the poorest countries to free up their resources that enable them to fight COVID-19.
All debt services that are due in this period will be included in new loans whose payments will not begin until June 2022. Loans will be paid in three years. The G20 countries will consult with the IMF and the World Bank about whether the suspension period should be extended to June 2021 or not, depending on how challenges related to COVID are formed at that time.
Meanwhile, Foreign Minister Shah Mehmood Qureshi welcomed Thursday the decision of the G-20 countries to provide substantial assistance to 76 developing countries as “historic” saying the aid must be inclusive and without “heavy requirements”. The announcement came as Pakistan faced nearly 7,000 confirmed cases of the corona virus with more than 100 deaths.
All bilateral official creditors will be part of this latest initiative, which generates $ 20 billion in direct liquidity to support the health systems of poor countries. Pakistan also called for international unity and asked US President Donald Trump to review his decision to suspend funding from the World Health Organization (WHO).
“This is my personal view, but I think they should examine it, because it is time for us to unite and join together. WHO has many responsibilities at the moment. Cutting their funds will only add to their responsibilities. Burden,” he said. This special G-20 debt write-off relates to all principal and interest payments, starting from 1 May and will continue until 1 December 2020, but Qureshi suggests that it can go beyond December.
“The developing world does not have the right fiscal space and health system. Therefore, the most appropriate response that can be given by other countries at present is to provide debt relief,” he said, adding that Pakistan spends $ 10 to $ 12 annually. billion alone for debt repayment. “Details are being worked on but the debt reduction in the case of Pakistan is very large and will be significant, the foreign minister said during the media interaction at the Foreign Office. He said while the details were being worked on by the finance ministry, the impact of debt relief for Pakistan would be ‘substantial’. “Prime Minister of Finance Adviser Dr Abdul Hafeez Sheikh has said that we need to wait to measure the impact of debt reduction,” he said.
Qureshi said Prime Minister Imran Khan was the first to appeal to the leaders of rich countries, the UN secretary general and heads of financial institutions, to provide debt relief to developing countries such as Pakistan so they could fight COVID-19.
The State Department, he warned, had consulted with various ministries to ensure that there were comprehensive plans for debt reduction.
Qureshi said he had written and spoken with 30 foreign ministers over the past few weeks, seeking their help for Prime Minister Imran’s global initiative for debt reduction.
On Thursday, the foreign minister also met with Ms Teresa Daban Sanchez, IMF Resident Representative in Pakistan, who called her at the Foreign Office. “The foreign minister welcomed the announcement by the G20, the IMF, the World Bank and others about the debt service suspension initiative for debt-stressed countries.
He underlined that any initiative to support developing countries to combat the consequences of COVID-19 must be inclusive and without severe requirements, “said a statement issued by the FM office.
Referring to the great challenges posed by COVID-19, Qureshi highlighted Prime Minister Imran Khan’s plea for the “Global Initiative on Debt Removal” for developing countries giving them fiscal space to fight disease, save valuable lives, and sustain the economy.
Earlier, the Chinese State Council and Foreign Minister Wang Yi spoke to Qureshi saying they would continue to provide all possible support to Pakistan in the midst of the coronavirus crisis.
“We will continue to provide all possible support according to Pakistan’s needs to help overcome the epidemic as soon as possible,” he said according to a statement by the Chinese Foreign Ministry.
Wang Yi said the Chinese government had given Pakistan a lot of material assistance, and also sent a group of medical experts to hold an expert video conference to share prevention and treatment experiences. Qureshi expressed his gratitude to China for its valuable support for Pakistan’s struggle against the virus. “Facing an unprecedented global public health and health crisis, China’s steps are appropriate and strong, and have achieved positive results. Pakistan appreciates this, “he added.
Commenting on the process of bringing back stranded Pakistanis, Qureshi said that in the first week some 2,000 citizens were brought back while the coming week would increase to 7,000.
Meanwhile, IMF Managing Director Kristalina Georgieva said the IMF Executive Board had agreed to establish a Short-Term Liquidity Line (SLL) to further strengthen the global financial safety net as part of the IMF’s COVID-19 response.
This facility is a rolling and renewable backstop for member countries with very strong policies and fundamentals that require moderate medium-term balance of payment support, he said in a press statement on Thursday.
In this case, the Short Term Liquidity Line will provide revolving access of up to 145 percent of the quota, he added.
“The Short-Term Liquidity Line will further strengthen a country’s liquidity buffer and thus assist in managing liquidity pressures.
Complementing other instruments during the current crisis, this facility will fill critical gaps in the IMF toolkit and help facilitate a more efficient allocation of resources, “the statement added.
Meanwhile, the State Bank of Pakistan (SBP) Thursday cut interest rates by 200 basis points, bringing it to 9% from 11%.
The decision was announced in a Monetary Policy Statement issued by the central bank in which he stated that the decision had been taken because “the global and domestic outlook is getting worse” because of the coronavirus pandemic.
“MPC is of the view that this action will mitigate the impact of Coronavirus shocks on growth and employment, including by reducing borrowing costs and the burden of household and corporate debt services, while also maintaining financial stability. This will also help ensure that economic activity is better placed to recover when the pandemic subsides, “read the statement from the SBP.
The SBP notes that its steps will help provide support to the economy that is similar to the recent steps taken by the central bank, which includes employment schemes.
According to the scheme, companies that do not lay off their workers will be able to take advantage of low-interest loans.
SBP’s steps to regulate economic activities include providing a one-year extension facility in principal payments, doubling the loan rescheduling period from 90 to 180 days, and soft financing for hospitals and health centers incurred costs to fight the pandemic coronavirus virus. This is the second time the interest rate has been reduced by the SBP in one month.
The central bank has cut interest rates by 4.25% in one month to tackle the corona virus which has adversely affected businesses globally and in Pakistan. On April 10, SBP Governor Reza Baqir had indicated that the central bank would cut interest rates in the future. Baqir has appeared on the Geo News ‘Aaj Shahzeb Khanzada Ke Sath’ program where he said the SBP was monitoring the situation and would take action on interest rates if deemed so. “The statistics we have with us clearly show that inflation is expected to decline even in the coming days,” he said.
“As we continue to receive information about the country’s economy, Bank Negara will be ready to take action in the future regarding interest rates,” he added.
FAIRWAY, KS (KCTV) – Some countries are more fortunate than others against COVID-19 now.
In Australia, the number of new infections starts to slow down as they enter the suppression phase. Of the 6,203 confirmed cases in Australia, 53 people have died due to COVID-19.
One couple, who met here in Kansas City, spoke with KCTV5 News about the lives of those who live in Australia during strict social distance guidelines that are being enforced.
Robert Buehrig grew up in Missouri and Aurelie Roque grew up in Kansas. The couple are now following strict orders to remain in their current home in Australia.
“This will be my fifth week working at home,” Robert said. “Nice to have you!” Aurelie said, giving him a hug.
Although Robert and Aurelie are thousands of miles away from Kansas City in their home in Queensland, their experience during the COVID-19 pandemic is very similar to our experience on this metro.
While we briefly packed the park, people in Australia packed the beach.
“They issued fines for going to the beach and sending police to patrol,” Robert said.
Shopping for groceries can be frustrating in both countries.
“It’s naked,” Aurelie said, “like a freakin apocalypse has taken place. Nothing in the freezer. All meat is gone. There is a lot of fear out there.”
People living in Australia have the same concerns about the economy and job loss. Aurelie said the real fear for people is being able to put food on the table.
Even so, there are some differences. Social gatherings of more than two people are prohibited. You can only leave the house for important reasons. The Australian Prime Minister announced the country was closing its borders with all foreigners on March 20.
“Borders are closed, also between countries,” Aurelie said. “The state is very large, you know. This is not like running between Kansas and Missouri. “
“If we cross the border, then a fine of thousands of dollars,” explained Robert.
In Australia, they see more law enforcement. Robert said, “The main difference is that they enforce it from an early age. We have been locked since March 10. “
Just like us in the U.S., they are waiting to find out when restrictions can be lifted safely without the risk of a devastating second wave.
“From the overall reaction, I would say people are holding fast to this here,” Robert said.
“Everyone we know is fully locked,” Aurelie said. “Full locking.”
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