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Sri Lanka ex-CB chief moots Coronavirus revival funds for vulnerable persons, businesses with WB, IMF relief

ECONOMYNEXT – The International Monetary Fund and the World Bank should give relief to debtor nations which can be channeled to funds into dedicated funds to revive businesses and help vulnerable persons, Sri Lanka’s ex Central Bank Governor Nivard Cabraal has said.

Cabraal, who is also senior advisor to Sri Lanka’s Finance Minister, last week called for ‘meaningful relief’ for debtor nations from the International Monetary Fund and the World Bank by permanently writing off all capital and interest on loans due in 2020 and 2021.

He also asked that a part of such savings be used as seed capital to set up a ‘Business Revival Fund’ and a ‘Vulnerable Persons Relief Fund’.

Pope Francis also called for debt relief on Easter Sunday.

The IMF and World Bank had earlier called for creditor nations to give relief to 75 countries that qualify for concessionary loans from the World Bank.

Sri Lanka’s President Gotabaya Rajapaksa had also called for relief.

The World Bank gives money for poor countries to spend on infrastructure and health.

The IMF gives money for countries with soft-pegged countries (countries with central banks that intervene in forex markets and also print money) that inject liquidity and gets into currency crisis to re-build foreign reserves.

Such funds are typically invested in US Treasuries lowering the interest rates of US Treasuries. (Colombo/Apr14/2020)

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