G20 Agrees to Suspend Debt Payments of World’s Poorest Nations Due to Coronavirus

The world’s 20 biggest financial leaders have decided to postpone debt servicing in the poorest countries by allowing them the headroom to spend cash on coronavirus.

Both principal repayments and interest payments will be suspended from May 1 until the end of the year, the G20 said in a joint statement following the group’s finance ministers and central bankers’ virtual meeting on Wednesday. They also asked private creditors to join the initiative “on comparable terms”.

“We are determined to spare no effort, both individually and collectively, to protect lives, overcome the pandemic, safeguard people’s jobs and incomes, support the global economy during and after this phase and ensure the resilience of the financial system,” the G20’s finance ministers and central bankers said in a communique.

All G20 members agreed to an action plan that includes a comprehensive IMF package and support measures proposed by the World Bank and other multilateral lenders that collectively amounts to $200 billion (Dh734bn).

“Our aim with the action plan is to support the necessary health response and [take] measures … preventing a liquidity crisis turning into a solvency crisis and global recession becoming a global depression, Saudi Arabia’s finance minister Mohammed Al Jadaan said at a joint teleconference with the country’s central bank governor, Ahmed Al Kholifey, after the meeting. Saudi Arabia has the G20 rotating presidency this year.

Covid-19, as the illness is called by the World Health Organisation, has infected more than 2 million people globally and killed about 129,000, according to the Johns Hopkins University, which is tracking its spread. More than 500,000 people have recovered.

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