The International Monetary Fund (IMF) has approved USD 356.5 in financing to aid Myanmar’s fight against COVID-19 and efforts to protect its economy. IMF has granted the financing in two forms: a disbursement of about USD 118.8 million under its Rapid Credit Facility and a purchase of about USD 237.7 million under its Rapid Financing Instrument. The IMF said this financing will also catalyze additional support from the international community, including under the Debt Service Suspension Initiative supported by the G-20 and the Paris Club. “This will help meet the urgent balance-of-payments and fiscal needs arising from the COVID-19 pandemic, support the government’s plans to boost spending especially on health and social safety nets,” the IMF said in a statement.
The new capital will add to a pot of foreign COVID-19 financing that has topped USD 2.5 billion. The biggest lenders also include the Asian Development Bank and the Japan International Cooperation Agency. Some of this money is being used to support Myanmar’s healthcare system, including purchasing masks and other protective equipment, employing medical staff, and increased testing. However, the majority will go towards the COVID-19 Economic Relief Plan (CERP), a comprehensive set of economic stimulus and recovery measures that ranges from tax breaks, to soft loans for businesses, to direct payments to households. The total cost of these measures will likely be around USD 2.5 billion, but they may help protect Myanmar’s economy from what is shaping up to be a catastrophic blow. The new IMF funding is ostensibly in support of CERP. “In addition to increasing health expenditures, the government is expanding food distribution and cash transfer programs to the most vulnerable and supporting businesses and farmers across all regions of the country,” the IMF continued. “The IMF continues to monitor Myanmar’s situation closely and stands ready to provide further advice and support if needed.”